--

10 (2) 2020

State-ownership and bank risk: A case of Vietnamese commercial banks


Author - Affiliation:
Nguyen Thanh Hung - School of Banking, University of Economics Ho Chi Minh City , Vietnam
Pham Phu Quoc - School of Banking, University of Economics Ho Chi Minh City , Vietnam
Corresponding author: Nguyen Thanh Hung - thanhhung.tg@gmail.com

Abstract
The paper aims to verify the impact of state-ownership on banks’ risks at Vietnamese commercial banks. Based on the survey data of 31 commercial banks in Vietnam from 2007 to 2018, the empirical result shows that the state-ownership in the Vietnamese commercial banks has a decrease in the banks’ risks. Besides, the research result is shown that the lower Vietnamese commercial banks’ risks at the previous time lead to the lower ones at present. Furthermore, this evidence contributes to the debate of state-ownership for the Vietnamese commercial banks which gives policy-makers to pay more attention to the efficiency of joint-stock state-ownership.

Keywords
bank risk; FE; GMM system; Pooled-OLS; RE; state-ownership

Full Text:
PDF

Cite this paper as:

Nguyen, T. H., & Pham, P. Q. (2020). State-ownership and bank risk: A case of Vietnamese commercial banks. Ho Chi Minh City Open University Journal of Science – Economics and Business Administration, 10(4), 60-67. doi:10.46223/HCMCOUJS.econ.en.10.2.965.2020


References

Agusman, A., Cullen, G. S., Gasbarro, D., Monroe, G. S., & Zumwalt, J. K. (2014). Government intervention, bank ownership and risk-taking during the Indonesian financial crisis. Pacific-Basin Finance Journal, 30(C), 114-131. doi:10.1016/j.pacfin.2014.07.003


Andrianova, S., Demetriades, P., & Shortland, A. (2008). Government ownership of banks, institutions, and financial development. Journal of Development Economics, 85(1), 218-252. doi:10.1016/j.jdeveco.2006.08.002


Berger, A. N., Hasan, I., & Zhou, M. (2009). Bank ownership and efficiency in China: What will happen in the world’s largest nation? Journal of Banking & Finance, 33(1), 113-130. doi:10.1016/j.jbankfin.2007.05.016


Bertay, A. C., Demirgüç-Kunt, A., & Huizinga, H. (2015). Bank ownership and credit over the business cycle: Is lending by state banks less procyclical? Journal of Banking & Finance, 50(C), 326-339. doi:10.1596/1813-9450-6110


Clarke, G. R., Cull, R., & Shirley, M. M. (2005). Bank privatization in developing countries: A summary of lessons and findings. Journal of Banking & Finance, 29(8), 1905-1930. doi:10.1016/j.jbankfin.2005.03.006


Cornett, M. M., Guo, L., Khaksari, S., & Tehranian, H. (2010). The impact of state ownership on performance differences in privately-owned versus state-owned banks: An international comparison. Journal of Financial Intermediation, 19(1), 74-94. doi:10.1016/j.jfi.2008.09.005


Dam, L., & Koetter, M. (2012). Bank bailouts and moral hazard: Evidence from Germany. Review of Financial Studies, 25(8), 2343-2380. doi:10.1093/rfs/hhs056


García-Herrero, A., Gavilá, S., & Santabárbara, D. (2009). What explains the low profitability of Chinese banks? Journal of Banking & Finance, 33(11), 2080-2092. doi:10.1016/j.jbankfin.2009.05.005


Hryckiewicz, A. (2014). What do we know about the impact of government interventions in the banking sector? An assessment of various bailout programs on bank behavior. Journal of Banking & Finance, 46, 246-265. doi:10.1016/j.jbankfin.2014.05.009


Iannotta, G., Nocera, G., & Sironi, A. (2013). The impact of government ownership on bank risk. Journal of Financial Intermediation, 22(2), 152-176. doi:10.1016/j.jfi.2012.11.002


La Porta, R., Lopez‐de‐Silanes, F., & Shleifer, A. (2002). Government ownership of banks. The Journal of Finance, 57(1), 265-301. doi:10.1111/1540-6261.00422


Micco, A., & Panizza, U. (2006). Bank ownership and lending behavior. Economics Letters, 93(2), 248-254. doi:10.1016/j.econlet.2006.05.009


Mohsni, S., & Otchere, I. (2014). Risk taking behavior of privatized banks. Journal of Corporate Finance, 29, 122-142. doi:10.1016/j.jcorpfin.2014.07.007


Xiao, S., & Zhao, S. (2012). Financial development, government ownership of banks and firm innovation. Journal of International Money and Finance, 31(4), 880-906. doi:10.1016/j.jimonfin.2012.01.006


Zhu, W., & Yang, J. (2016). State ownership, cross-border acquisition, and risk-taking: Evidence from China’s banking industry. Journal of Banking & Finance, 71, 133-153. doi:10.1016/j.jbankfin.2016.05.004


Windmeijer, F. (2005). A finite sample correction for the variance of linear efficient two-step GMM estimators. Journal of Econometrics, 126(1), 25-51. doi:10.1016/j.jeconom.2004.02.005



DOI: https://doi.org/10.46223/HCMCOUJS.econ.en.10.2.965.2020
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.