Doctoral thesis in Economics: Bank restructuring and efficiency the case of Vietnam

The thesis studies the relationship between restructuring measures of commercial banking system and the process of restructuring commercial banks affecting the performance of banks as well as the whole banking system. trade in Vietnam, a small open economy and in the process of transition to integration.

1 MINISTRY OF EDUCATION AND TRAINING UNIVERSITY OF ECONOMICS HO CHI MINH CITY NGUYEN HUU HUAN BANK RESTRUCTURING AND EFFICIENCY ­ THE CASE OF VIETNAM  DOCTORAL THESIS IN ECONOMICS Ho Chi Minh City – 2019 MINISTRY OF EDUCATION AND TRAINING UNIVERSITY OF ECONOMICS HO CHI MINH CITY NGUYEN HUU HUAN BANK RESTRUCTURING AND EFFICIENCY ­ THE CASE OF VIETNAM                                                            Industry: Banking and Finance                                            Industry ID: 83.40.201 DOCTORAL THESIS IN ECONOMICS                                                             Instructor: AsPro.Dr Tran Huy Hoang                                                                             AsPro.Dr Vo Xuan Vinh Ho Chi Minh City – 2019 STATEMENT OF AUTHORSHIP I’m hereby declare that this submission is my own work and except where  due   reference   is   made;   this   thesis   contains   no   material   previously   published   or  written by another person(s) This thesis does not contain material extracted in the whole or in part from  thesis or report presented for another degree of diploma in University of Economics  Ho Chi Minh city or in any other education institution Nguyen Huu Huan July 2019  TABLE OF CONTENT LIST OF TABLES LIST OF FIGURES Figure 3.1. Result after the merger of the authorized capital………………………55 Figure 3.2. Result after banking consolidation and merger in 2015……………….57 ABBREVIATION 2SLS: Two­stage least squares CBs: Commercial banks DEA: Data Envelopment Analysis DMU: Decision unit ESS: Scale­efficiency hypothesis ESX: X­efficiency hypothesis GLS: Generalized least squares IMF: International monetary fund NPL: Non performing loan OLS: Ordinary Least Square QLH: Quiet­life hypothesis RMP: Relative market power ROA: Return on asset ROE: Return on Equity RQ1: Research question 1 RQ2: Research question 2 SBV: State Bank of Vietnam SCP: Structure, Conduct and Performance paradigm SEFF: Scale­efficient hypothesis SFA: Stochastic Frontier Analysis 10 VAMC: Vietnam Asset Management Company XEFF: X­Efficiency ABSTRACT The link between bank restructuring and bank efficiency is an appealing area  that draws strong attention from both academic and industry practitioners. Vietnam  offers   an   interesting   case   to   analyze   this   link   however   this   issue   remains  unexplored. This thesis investigates the association between bank restructuring and  bank   efficiency   in   Vietnamese   banking   system   The   thesis   employ   the   Data  Envelopment Approach and Stochastic Frontier approach. Our data sample includes  26 commercial banks covering the period 1999­2015.  The finding indicates that the government’s restructuring policies in the first  stage did not benefit the banks implementing the restructuring methods. Regarding  to  the   effect  of  different   restructuring   methods,   the   privatization  of   state­owned  commercial banks, state intervention and mergers and acquisitions (M&As) do not  substantially   improve   efficiency   Besides,   it   is   found   that   the   bank   efficiency  declines during the restructuring period not only because of the transition cost but  also due to the changes of other environment variables, such as financial crisis or  domestic economy slowdown The thesis contributes to the banking literature by examining the allocative  and technical efficiency of Vietnamese banking system in the recent period (2001­ 2015)  It  shows   that decreasing  the  government's   control  of the   banking  system  makes the system more competitive. On the other hand, it makes domestic banks  ... link   however   this   issue   remains  unexplored. This thesis investigates the association between bank restructuring and bank   efficiency   in   Vietnamese   banking   system   The   thesis. .. indicated that the performance efficiency of the United States’ banks was unaffected  after the   banking restructuring   Therefore,  this thesis  needs   to research the  linkage  between bank restructuring and efficiency to investigate whether this relationship in an ... improve   the   efficiency   of   the   banking   operation   In   this  statement, the restructuring includes financial restructuring, restructuring activities and corresponding safety monitoring with three goals. Alexander (1997) suggested that "A