tailieunhanh - Analysis of factors affecting performance of Vietnamese commercial banks: Testing SCP and ES hypotheses

The results show that it is market concentration instead of market share that has positive effects on bank performance as shown in their return on average assets (ROAA) and return on average equity assets (ROAE). | JED January 2014| 81 Testing SCP and ES Hypotheses Analysis of Factors Affecting Performance of Vietnamese Commercial Banks: Testing SCP and ES Hypotheses PHAN THU HIỀN University of Economic HCMC Email : phanthuhien@ PHAN THỊ MỸ HẠNH University of Finance and Marketing Email : phanmyhanhnt@ ARTICLE INFO Article history: Received: June 17, 2013 Received in revised form Sep. 20, 2013 Accepted: Dec. 31, 2013 Keywords: influential factors, market structure, commercial banks, business performance, ES, SCP. ABSTRACT The research aims at analyzing factors impacting on performance of Vietnamese commercial banks in the years 2005-2012. The authors test SCP (structure-conduct-performance) and ES (efficient structure) paradigms for factors affecting return ratios of banks. The results show that it is market concentration instead of market share that has positive effects on bank performance as shown in their return on average assets (ROAA) and return on average equity assets (ROAE). Additionally, bank size, ownership, ratio of deposit to total asset and inflation rate also produce effects on performance of commercial banks in Vietnam. These findings allow authors to offer some measures to support a sustainable development for Vietnamese commercial banks. 82 | Phan Thu Hiền – Phan Thị Mỹ Hạnh | 81 - 92 1. INTRODUCTION Banking system always plays an important role in economic stability, and development of a country and its network of branches is considered as arteries of an economy. Thus, stable and healthy activities of a banking system will support a sustainable development for the economy. Many Vietnamese commercial banks witnessed falls in their profits (Hàn & Ngọc, 2012) and rises in their bad debts (Thanh & Bạch, 2013) after the financial crisis and the global economic recession in the years 2007-2009. This situation badly affected performance of banks as well as Vietnam’s economic stability. Analyzing impacts of influential factors .