Assess the impact of social capital on business activities of commercial banks in order to exploit the positive role and limit the negative impact of social capital on business activities of commercial banks in Ho Chi Minh city.
MINISTRY OF EDUCATION AND TRAINING THE STATE BANK OF VIETNAM BANKING UNIVERSITY OF HO CHI MINH CITY VU CAM NHUNG EVALUATING THE IMPACTS OF SOCIAL CAPITAL TO ACTIVITIES OF COMMERCIAL BANKS IN HO CHI MINH CITY SUMMARY OF DOCTORAL THESIS Major: Finance - Banking Code: 9.34.02.01 Academic advisor: Assoc Prof Dr Nguyen Thi Nhung Dr Huynh Thanh Dien HO CHI MINH CITY - 2018 CHAPTER 1: INTRODUCTION 1.1 The urgency of the research topic The activities of business in general and commercial banks in particular are dominated by all social relationships In the process of its operation, banks are able to link well with customers, partners, projects and programs, the mobilization of capital, loans, investment is also more convenient Beside the positive side, the relationships also show the negative side In the last period, the phenomenon of mutual acquisition between banks, take advantage of relationships with officials to serve the interests of the individual group, causing market manipulation and psychological insecurity for market participants (Nguyen Duc Chien 2013) Recent economic cases involving bank leaders have caused thousands of billion loss to the economy, partly due to social ties, including relationship of bank leaders At the same time, there are still phenomena of internal collusion for funds, fake record for savings, loans causing loss of reputation for banks and affecting to the banks ‘s development In particular, fraudulent lending in developing economies such as Vietnam is quite high, influence the results of the bank deeply (Leonard Onyiriuba 2016) After the crisis in 20072009, confidence in the financial services industry has been severely diminished (Benamati et al 2010) Trust is an important foundation for the bank's sustainable development Faith is also the basic core to building and developing a network of relationships (social capital) (Dasgupta 2002; Koniordos 2005 quoted in Crystal Holmes Zamanian & Lisa Åström 2014) The study of social capital for the banking sector in the context of low credibility, such as the banking industry (one of the least reliable with 49% compare with technology, or electronic production with 70-73% in the world ranking (Edelman Trust Barometer 2013) is essential and this research is also potential to clarify social capital for the financial services industry and contribute to the current context, when the faith is affected after the crisis (Maskell 2000) Social relationships are both positive and negative Especially, last time the negative in the banking sector is a big problem for the society, so the banks themselves and the government need a theoretical framework to realize the impact of these relationships on the bank's operations as well as solutions to promote positive effects and limit negative effects from these social relationships This helps commercial banks to effectively use these relationships in their business operations The relationship between social capital in the banking sector, there have been studies in the world and in Vietnam, such as Xie Wenjing (2013; Crystal Holmes Zamanian and Lisa Åström (2014); Heru Sulistyo and the authors (2015); Justin Yiqiang & the authors (2017); Huynh Thanh Đien (2011) Most of the research is qualitative and only deals with some aspects of the relationship between social capital and banking, and there is no study evaluating the relationship between social capital and the activities of Bank That's the space for the researcher Starting from the above mentioned, the author has chosen to study the topic of "Evaluating the impact of social capital to the activities of commercial banks in Ho Chi Minh City" 1.2 Research objectives and questions General goal: Assess the impact of social capital on business activities of commercial banks in order to exploit the positive role and limit the negative impact of social capital on business activities of commercial banks in Ho Chi Minh city Detail goal: - Discover and measure the composition of the bank's social capital and business activities of Vietnamese commercial banks - Accreditation of the scale and model testing about banks ‘s social capital affect to the activities of commercial banks in Vietnam, typical case: commercial banks in Ho Chi Minh City - Suggesting policy to help commercial banks in Ho Chi Minh City improve their performance through the use of social capital At the same time, suggest policy to help policymakers and government support Vietnamese commercial banks develop positive forms of social linkages and limit the form of negative social linkages Research question: To achieve the above objectives, the topic should answer the following research questions: - How are the social capital of the bank and the activities of the commercial banks recognized and measured? - How is the model of research on social capital affecting the operation of commercial banks built in Vietnam? - What are the policy implications of improving the performance of commercial banks through the use of social capital? 1.3 Research subject, scope and research method Research subject: The research is to study the impact of social capital on the activities of commercial banks in Ho Chi Minh City The surveyed subjects are leaders (directors/deputy directors of branches) of commercial banks in Ho Chi Minh City Scope: The study is limited to commercial banks operating in Ho Chi Minh City between June 2015 and December 2016 Research method: To achieve the research objectives and answer the research questions posed by the topic, the thesis using qualitative and quantitative methods will be presented in chapter 1.4 The main contribution of the thesis The scientific contributions: - The first contribution of the thesis was to build up a full social capital scale in all three aspects of the internal, external networks and the bank leadership on the basis of theoretical and qualitative research, private features of Vietnam banking - The research identified the basic groups of commercial banks as capital mobilization, using capital and providing service activities The scale of commercial banks' activities has been tested for credibility in the case of Vietnamese commercial banks, ensuring the value and reliability of their assets so that they can be inherited for related research in Vietnam - The research results show the direct and indirect effects of social capital on the groups operating in commercial banks, thus confirming that social capital is a resource that banks need to plan for its business strategy is to be able to exploit and use effectively in the business process of the bank The results of the model test for the typical case of Ho Chi Minh City have contributed to the theoretical as well as the scientific basis, contributing to the foundation of further research about the relationship between social capital and business activities is not only in the banking industry but also in other economic sectors Practical contributions - The thesis has built and tested the social capital scale on all three aspects include of the inside, out side and the bank leadership, which helps the bank to identify the framework for creating, using, development and assessment of social capital in the bank Banks will then devise strategies to exploit, develop and use social capital to promote business activities - The dissertation has developed and tested the scale of commercial banks' business groups, while pointing out the link between all activities through out the theoretical and practical accreditation activities in Ho Chi Minh City This will help banks to evaluate more comprehensive operational groups - The thesis also shows the positive and negative effects of social capital in the banking sector This will help state management agencies at all levels to recognize the importance and motivation of this resource to timely formulate policies to promote positive forms of social cohesion Limited form of negative social capital in the banking sector of Vietnam - The results of the thesis also support the association of Ho Chi Minh City Bank and the Vietnam Bankers Association in recognizing the importance of social capital as well as creating value from the affiliate networks Members of the association can exploit the benefits of these networks for the business process 1.5 The organization of the study Chapter 1: Introdution Chapter 2: Theoretical foundation and analytical framework for the relationship between social capital and commercial banking activities Chapter 3: Research method Chapter 4: Accreditation modeling research and discussion Chapter 5: Conclusions and recommendations CHAPTER 2: THEORETICAL AND ANALYSIS FRAMEWORK THE RELATIONSHIP BETWEEN SOCIAL CAPITAL AND COMMERCIAL BANKS’ ACTIVITIES 2.1 SUMMARY OF SOCIAL CAPITAL AND SOCIAL CAPITAL IN BANKING 2.1.1 Social capital concept The concept of social capital was first mentioned in 1916, by Lyda Judson Hanifan, an American educator He uses the notion of social capital to refer to friendship, mutual understanding, and interaction between individuals or families According to Bourdieu.P (1986), social capital is the resource that exists in relationships between individuals or organizations (collectively referred to as the subject), thereby benefiting all stakeholders Beneficial in mobilizing resources Similarly, the views of Nahapiet & Ghosal (1998), the authors argue that social capital is the resource that exists within the social networks of the organization or individual (collectively referred to as the subject) This social network helps social stakeholders to mobilize more resources According to Aslaninan (2011), social capital is the value created when individuals join together in a group or network, a social network where resources and information are invested In summary, it is possible to understand that social capital is the resource of an individual or group or organization (collectively referred to as the subject) formed and developed on the basis of interrelated networks of mutual trust each other (quality relations networks) 2.1.2 Previous studies related to the topic: Xie Wenjing (2013), in his thesis exploring the relationship between social capital and banking risk The empirical results show that banking risk is lower in countries with higher social capital, mean in areas with high social capital, banks are far from being at risk of bankruptcy Crystal Holmes Zamanian and Lisa Åström (2014) analyze the social capital investment of banks Research also shows that the benefits of building and nurturing social networks (or social capital) are important to banks The study also shows that banks need to invest more deeply in relationships and provide technology to help banks build relationships with partners In the study by Heru Sulistyo et al (2015), examined the role of social capital in the loyalty of Islamic banking customers in Central Java The results show that social capital has a significant and positive impact on customer loyalty to the bank Justin Yiqiang et al (2017), in a study of the relationship between social capital and bank stability, the authors point out that banks in higher social capital areas are less likely to fail and face to less financial problems during the 2007-2010 crisis than banks in low social capital areas Most of the research works are qualitative and handle only some aspects of the relationship between social capital and economic development, as well as the banking sector Huynh Thanh Dien (2011) in the thesis analyzing the contribution of social capital to Vietnam’ real estate companies in Ho Chi Minh City The research has built up the scale of social capital is more complete when mentioned to all three aspects of internal, external and business leaders network Research results also show the direct and indirect contributions of social capital to the operating groups of the real estate business The results of this study will suggest that the authors study the impact of social capital on the banking sector 2.1.3 Social capital in banks 2.1.3.1 The concept of social capital in banks Social capital in banks is the sum of the resources of an individual, group, or organization that exists in relationships that link, share, and trust each other in accordance with accepted social norms 2.1.3.2 The meaning of social capital in banks - Social capital reduces the cost of information, transaction costs and monitoring costs - Social capital contributes to reducing financial costs, credit costs - Social capital helps reduce loan losses - Social capital increases the supply of credit - Social capital encourages customers to use the bank’ products and services 2.1.3.2 Character of social capital in the operation of commercial banks -Ttwo-sided (positive and negative) - Profitability - Replacement / addition of other capital types - Cohesiveness - Bridging - Accumulated over time 2.1.4 The basic component of social capital in the bank 2.1.4.1 Social capital of bank leaders Social capital of the bank leaders is mentioned as the network and the quality of relationships of bank leaders The author Tushman & O'Reilly III (1997), pointed out that a network of leaders including relatives, friends, business partners, colleagues, press agencies, and officials members of the state management agencies, research institutions, clubs 2.1.4.2 External social capital of the bank External social capital of the bank is referred to as the network and the quality of external relationships of the bank Kaasa's (2007) study, pointed out that external social capital includes relationships with friends, colleagues, relatives and neighbors Landry et al (2000); Jansen et al (2011) and Yang et al (2011), in their studies, have identified components of a horizontal corporate external network of customers, investors, corporations, consulting firms, clubs, competitors in the same industry; and vertically composed of parent companies - children in the same corporation and government at all levels Joanna Wyrwa (2014) mentions social capital outside the enterprise as the quality of external corporate networks associated with its activities (involving stakeholders such as customers, suppliers , Business Partners); environment (institutions, competitors, government officials, media); and the market (current customers, prospects, clubs) 2.1.4.3 Internal social capital of the bank Internal social capital of the bank is referred to as the network and the quality of relationships inside the bank Authors Cheng & colleagues (2006), Goyal & Akhilesh (2007), Nisbet (2007), and Schenkel & Garrison (2009) in their studies have shown that the horizontal is the quality of relationships between employees and functional departments; and vertically is the quality of the relationship between the upper level individual and the lower level individual, between the superior functional department and the lower level functional unit 2.2 BASIC ACTIVITIES OF COMMERCIAL BANKS Activities of commercial banks include: (1) capital activities: equity, mobilized capital, loans, other capital; (2) using capital activities: fixed asset acquisition, reserving, credit granting, investment; (3) providing service activities: treasury services, payment services, collection and payment, safes, financial consultancy, investment advisory, securities brokerage, insurance, foreign currency trading General understanding of the basic operation of commercial banks is through the implementation of professional operations capital resources, operations using the capital and professional services to maximize profits 2.3 ANALYTICAL FRAMEWORK OF RESEARCH From the theoretical relationship, in chapter 2, the thesis explored the framework for analyzing the relationship between social capital and commercial banking activities 15 Figure 4.1: CFA (standardized) scale of bank leaders’ social capital L2 L3 L1 0,96 0,86 L4 0,65 0,335 0,88 L5 067 Friends network 0,431 Colleagues network 0,90 L6 0,275 0,388 0,347 Network of officials 0,87 L12 0,542 Partners network 0,51 L7 0,77 0,78 0,95 0,83 L8 L11 L10 L9 Source: Calculations from survey data of the thesis author 4.3.1.2 Accreditation scale of bank’ external social capital The CFA results show that the model achieves market data compatibility, with 2(80) = 165,768 (P = 0.000); TLI = 0.938; CFI = 0.952 and RMSEA = 0.067; CMIN / dF = 2.072 The results also show that the CFA weights of all observed variables are greater than 0.5 (the smallest is 0.573), which confirms the uniqueness and convergence value of the observed variables of external social capital Next, the correlation coefficient of the components of the external social capital is less than unit with a significance level of 1% Therefore, these components achieve distinct values in the same concept 16 Figure 4.2: CFA (standardized) scale of bank’ external social capital BN14 BN16 BN15 BN13 BN17 0,84 0,82 0,57 0,538 Customer network 0,273 0,72 0,81 Partner network 0,85 BN18 0,334 BN30 0,371 0,308 0,84 BN29 communication network 0,88 0,385 0,452 0,617 BN28 0,456 0,73 0,487 Association network 0,366 government network 0,69 BN22 0,85 0,91 0,87 0,72 BN25 BN27 0,67 BN24 BN26 BN23 Source: Calculations from survey data of the thesis author 4.3.1.3 Accreditation scale of bank’ internal social capital The CFA results show that the model achieves market data compatibility, with 2(33) = 72.3 (P = 0.000); CFI = 0.965 and RMSEA = 0.070; CMIN / DF = 2.190 The results also show that the CFA weights of all observed variables are greater than 0.5 (smallest is 0.60), which confirms the uniqueness and convergence value of the components in the scale of internal social capital Next, the correlation coefficient between the two components of the internal social capital concept is less than one unit with a significance level of 1% Therefore, these components achieve distinct values in the same concept 17 Figure 4.3: CFA (standardized) scale of bank’ internal social capital BT37 BT31 BT38 0,76 BT32 0,73 0,70 0,76 Cooperation between individuals BT33 0,73 0,60 BT35 Cooperation between functional departments 0,66 0,79 BT34 0,608 BT39 0,80 0,69 BT36 0,70 BT40 BT41 Source: Calculations from survey data of the thesis author 4.3.2 Accreditation scale the second dimension of the concept of social capital The second dimension scale of social capital includes social capital of the leader, internal social capital and external social capital These three components measure the concept of social capital The resulting CFA model after correction correlated with market data, with: 2(37) = 106,613 (P = 0.000); CFI = 0.921, RMSEA = 0.080 and CMIN / df = 2.881 The results also show that the CFA weights of all observed variables are greater than 0.5 (smallest 0.545), which confirms the uniqueness and convergence value of the factors in the second dimension scale of the social capital Next, the correlation coefficient between the quadratic scales is less than one unit with a significance level of 1% Thus, these components gain distinction in the same concept of social capital of the bank 18 Figure 4.4: CFA (standardized) scale of bank’ social capital Colleagues Partners Friends 0,675 0,545 Officials 0,717 0,672 Leaders’ social capital 0,747 0,725 0,694 Internal social capital 0,832 Cooperation between functional departments Cooperation between individuals 0,54 72 External social capital 0,793 Customer 0,620 0,644 Communication 0,770 Association 0,687 Bussiness partner Government Source: Calculations from survey data of the thesis author 4.3.3 General Confirmation Factor Analysis for social capital scales, activities of commercial banks The CFA results show that the model after correction correlated with market data, with: 2(146) = 292.73 (P = 0.000); CFI = 0.912, RMSEA = 0.079 and CMIN / df = 2.005 (see item 2, appendix 10.) The results also show that the CFA weights of all observed variables are greater than 0.5 (smallest 0.56), confirming the uniqueness and convergent value of the component scales of the social capital, activities of the bank Next, the correlation coefficients between scales are less than one unit with a significance level of 1% Thus, the scale of social capital, the activities of banks are distinguished values 19 Figure 4.5: CFA (standardized) between concepts in the research model 0,63 CU47: Providing services to economic organizations CU46: Providing services to individual customers CV45: Loans to economic organizations CV44: Loans to Individual HD43: Mobilize capital from deposits of economic organizations HD42: Mobilize capital from individual deposits 0,66 0,77 0,60 0,68 Source: Calculations from survey data of the thesis author Communicaion Associations Government Bussiness partner Custoers Cooperation between individuals Cooperation between functional departments Officials Partners Friends Colleagues 0,6 0,56 0,69 0,61 0,69 0,57 0,82 0,7 0,73 0,65 External social capital Internal social capital Leaders’ social capital 0,79 0,8 0,83 Providing services activities 0,75 Using capital activities 0,86 Capital activities 0,70 0,73 0,65 0,70 0,71 0,73 Bank’ social capital 20 4.4 ACCREDITATION RESEARCH MODELS 4.4.1 Estimation of research model SEM estimation results with: 2(146) = 291.27 (P = 0.000); CFI = 0.925, RMSEA = 0.079 and CMIN / df = 1.995 According to Hu & Bentler (1999), the model is considered to be suitable for data when CFI are from 0.9 to 1; RMSEA ≤ 0.08; CMIN / df ≤ (Carmines & McIver 1981; Kline 2010) Based on the authors' table, the theoretical model after adjustment correlated with market data The model results are summarized in Figure 4.6 With a coefficient of 0.612, components of the concept of the bank's social capital explain for 61.2% of the variation in capital activity With a coefficient of 0.784, components of the concept of the bank's social capital explain for 61.2% of the variation in using capital activity With a coefficient of 0.709, components of the concept of the bank's social capital explain for 61.2% of the variation in providing services activity 21 Figure 4.6: SEM results of the research model (standardized) Using capital activities (0,784) 0,518***(H4+) 0,73 0,68 0,65 CU47: Providing services to economic organizations Capiatl activities (0,612) CU46: Providing services to individual 0,70 CV45: Loans to economic organizations CV44: loans to individuals HD43: Mobilize capital from deposits of economic organizations HD42: Mobilize capital from individual deposits 0,71 0,70 0,450***(H5+) Providing services activities (0,709) 0,587***(H2+) 0,396***(H3+) 0,608***(H1+) Bank’ social capital 0,83 Leaders’ social capital Internal social capital 0,65 0,7 0,73 0,56 External social capital 0,57 0,82 0,69 0,63 Comunication Source: Calculations from survey data of the thesis author 0,77 0,60 Association Government Business Customer Cooperation between individuals Cooperation between functional departments ban Officials Partners Colleagues Friends 0,6 0,79 0,8 22 4.4.2 Accreditation hypotheses The standardized results of the major parameters in the calibration model are shown in Table 4.1 and the standardized estimation results shown in Figure 4.6 show that the hypothesis is accepted 1% significance level Table 4.1: Regression (standardized) coefficients of relationships Hypothesis H1 Relationship between concepts Regression coefficient Increasing social capital of the bank has a positive 0,608 impact on the results of capital activities H2 Increasing social capital of the bank has a positive 0,587 impact on the results of using capital activities H3 Increasing social capital of the bank has a positive 0,396 impact on the results of providing services activities H4 Increasing in operating results of capital activities 0,518 having the same effect with the increasing in the results of using capital activities H5 Increasing in operating results of using capital 0,450 activities having the same effect with the increasing in the results of providing services activities Source: Estimates from the author's survey data 4.5 DISCUSSION RESULTS OF MODEL RESEARCH The results from the SEM model of the direct and indirect impact of the bank's social capital to the activities of commercial banks are presented in Table 4.2 23 Table 4.2: Impact of social capital on commercial banking activities Dependent Impact variable Bank’ social Capital Using capital capital activities activities Capital activities Direct Using activities Providing 0,608 Indirect - Total 0,608 capital Direct 0,587 0,518 Indirect 0,315 - Total 0,902 0,518 Direct 0,396 - 0,450 0,406 0,233 - 0,802 0,233 0,450 services activities Indirect Total Source: Calculated from the author's estimation results The results of the SEM model (standardized) show that the bank's social capital directly affects the bank’ capital activities expressed by accepting the hypothesis H1 with the standardized regression coefficient of 0.608 acceptable at meaning 1% The SEM results also show that social capital directly affects to the bank’ using capital activities expressed by accepting the hypothesis H2 with a standardized regression coefficient of 0.587 is acceptable at the 1% significance level In addition to the direct impact, the bank's social capital also indirectly impacts on the using capital through capital activities with a standardized regression coefficient of 0.315 Thus, the total impact of bank’ social capital on the bank to capital use with a standardized regression coefficient is 0.902 (= 0.587 + 0.315) For service providing, the SEM results also indicate that social capital directly affects to bank’ providing services activities expressed by accepting the H3 hypothesis with standardized regression coefficient of 0.396 accepted at 1% significance level In addition to, the direct impact of the bank's social capital on bank’ providing services, indirect impacts through the using capital and providing services with standardized regression coefficients is 24 0.406 Thus, the total direct and indirect impact of the bank's social capital on providing service activities with a standard regression coefficient is 0.802 (0.396 + 0.406) There are close and support links between the commercial bank activities By accepting the hypothesis H4 with a standardized regression coefficient of 0.518, the results of the thesis have shown that capital activities has a direct impact on the using capital activities This result is consistent with Kashyap et al (2002); Berger & Bouwman (2009); Ngo & Tripe (2017); Tram, Nguyen et al (2018); Sarah, Delpachitra & Pham, Dai Van (2015) In addition, the using capital directly affects providing service by accepting the H5 hypothesis with a standardized regression coefficient of 0.450 (This means that the bank, loans to borrower has an impact on the bank's providing services.) Thus, capital activities directly affect the using capital, the using capital directly affects the providing services, that is, capital activities indirectly affect the providing services through using capital activities with standardized regression coefficient is 0.233 (0.518 x 0.450 = 0.233) In short, the bank's social capital has both direct and indirect effects on the bank's activities, through the mutual interaction between bank activities 4.6 THE POSITIVE AND NEGATIVE EFFECTS OF SOCIAL CAPITAL TO COMMERCIAL BANKS 4.6.1 The positive effect - The positive support of social capital to bank’ mobilize capital (create capital for banks) This result also fit with the Zang & Fung results (2006) - For the activities of the bank, social capital has a positive support through promoting cooperation and cut the transaction cost This result is fit with results of Fernandez's Research (2011); Ross (2011) quoted in M Pastor & E T Ausina (2008); Martha & Howard (2011) - Social capital helps the bank to receive information and transfer knowledge (inside and outside the bank) to facilitate the bank's activities smoothly and timely update the knowledge to serve banking activities This result is consistent with the empirical results of Scupola et al (2009), Adler & Kwon (2002); Leana & Pil (2006); James S.Boles (2011) - Social capital contributes to reducing bank’ costs of checking credit and collecting information on clients, thus reducing transaction costs (Chuang & Lin 2008; Witt 2004) 25 4.6.2 Negative effect In addition to the positive effects of social capital on the banking sector, there are potential negative effects Expressions are as follows: Firstly, the relationship between bank leaders and government officials at all levels has a negative effect on the banking sector, as it demonstrates inequality in behavior of state officials at all levels to commercial banks (Alexi Danchev 2006; Bonin et al 2005; Gursoy & Aydogan 2002; Najid & Rahman 2011) Secondly, relationships outside the bank, in particular the bank's relationship with the authorities at all levels, have a negative effect on the banking sector as a demonstration of inequality in behavior of government all levels to commercial banks, especially between state commercial banks and joint stock commercial banks (Alexi Danchev 2006) Thirdly, the network systems within the bank has a negative effect when the new development limited, the path of the property, security, can be able to be a physical for development (Gargiulo) & Bernassi 1999; Hoang Ba Thinh 2009; Nguyen Duc Chien 2013) Fourth, a series of serious cases have taken place in the banking industry, causing great damage to the economy and society It can be said that most of the negativity of the banking industry in recent years are associated with social relations Therefore, solutions need to be developed to promote positive effects and limit negative effects of social capital 26 CHAPTER CONCLUSION AND RECOMMENDATIONS 5.1 CONCLUSION 5.1.1 Results of the construction and accrediation scale of the bank’ social capital The thesis has built the scale of bank’ social capital is the scale of the third dimension to ensure the value and reliability of the banking industry in Vietnam The scale has integrated quality and structure of network The three basic components of social capital are the social capital of the leader; external social capital and internal social capital of the bank 5.1.2 Results of the construction and accrediation scale of the commercial bank’ activities The results of the scale development show that the activities of commercial banks are unidirectional scale, specifically the capital activities (mainly capital mobilization), including the mobilize from deposits of individuals and receiving deposits of organizations economy; Using capital activities (mainly loans) include loans to individual customers, loans to economic organizations; Providing services includes the providing services to individual customers and to economic organizations 5.1.3 Estimation and accreditation of the research model The SEM estimation results shows that the theoretical model that achieves market data compatibility and research hypotheses is accepted at a 1% significance level The results of the study show the impact of the bank's social capital on the activities of commercial banks 5.2 RECOMMENDATIONS ON SOLUTIONS TO PROMOTE ACTIVITIES OF COMMERCIAL BANKS THROUGH USING OF SOCIAL CAPITAL 5.2.1 Awareness of the importance of social capital in the development strategy of commercial banks The bank should have an analysis frame, orientation and plan to use the resources of social capital to be able to exploit this resource in a positive and effective way for banks 5.2.2 Goal setting for measuring social capital in the bank An analytical framework is needed to access and measure social capital through specific objectives and measurement criteria 27 5.2.3 Development of bank leaders’ social capital In order to maintain and develop the social capital of the leader, it is necessary to establish and develop the relationship of the leader with the network of friends, colleagues, business partners and officials of state management agencies Be specific: with friends, personal leaders must spend time meeting, sharing, trust and help enthusiastic With colleagues, especially for subordinates, the leader must create credibility, beliefs and motivation to strive and distribute appropriate work of the workers to achieve the highest productivity In addition, a collaborative mechanism should be created to encourage copperation of individuals, which would best fulfill the bank's overall goals With business partners and government officials by frequent contact, frequent inquiries, like friends, meeting and willing to share, help each other in business opportunities When they are willing to give each other a chance to benefit each other, creating good trust from them, the chances of getting support and sharing would be higher 5.2.4 Development of external social capital To maintain and develop external social capital of the bank, it is necessary to create and develop a bank's relationship with its networks (clients, business partners, associations, government at all levels) in the spirit of mutual trust (believe here is to the extent to be able to verify the information provided by the subject); willing to share experiences, learn from each other In addition to finding a orientation, finding and creating business opportunities for each other (sharing opportunities), bringing benefits to each other, there is the cooperation between the new durable Specific policies should be developed for each external actor The more pragmatic and connected their interests are, the longer they will be Banks need to exploit and use CRM (Customer Relation Management) software to manage and exploit relationships with customers 5.2.5 Development of internal social capital In order to maintain and develop the social capital within the bank, it is necessary to establish and develop relationships between individuals and functional departments in both horizontal and vertical terms on the basis of mutual cooperation Specifically: 28 Banks must continually improve their systems so that they can operate effectively, focusing on transferring knowledge between individuals and functional departments to advance together A mechanism should be established to create effective cooperation (including banking culture) Establish a mechanism to effectively monitor and supervise the cooperation between individuals / functional departments Enhancing the system throughout the bank's operations, the bank should have appropriate policies and targets to reduce the resistance between the functional departments 5.2.6 Macro policy recommendations to support banks to promote the positive effects of social capital In order to contribute to the creation of an external social capital for the bank, it is necessary to have support from the state bank to build a legal corridor for the development of financial and monetary products that link the stakeholders State bank and associations should have investment programs to develop social interaction channels between commercial banks, between commercial banks and related sectors 5.2.7 Suggested macro and micro policy support banks to limit the negative effects of social capital Some macro policy suggestions The State Bank, as the regulator of State management agencies, needs to build a good legal framework, creating a common and fair playing field for commercial banks The State Bank should have a documentation of the process, procedural guide to facilitate access to capital and to benefit from support from the fair policy of all commercial banks The allocation of resources must be based on market principles, ensuring efficiency Some micro policy suggestions The bank itself needs to have a rigorous business process, clear division of responsibilities among functional departments in the settlement process, avoiding chaining errors 29 Banks need to develop effective monitoring and decentralization mechanisms, but they must have strict evaluation and control, avoid abuse of power, disrupt internal and affect banking It is necessary to raise the corporate culture and professional ethics in the bank 5.3 LIMITATION OF THE RESEARCH AND FURTHER RESEARCH - The scale and model of research in the thesis has only been verified in Ho Chi Minh City so it is not possible to confirm the suitability for other localities Therefore, further research is needed to test the scale and theoretical models for the banking sector in other localities - The thesis evaluates social capital primarily through the perception scale (depending on the subjectivity of the respondents), should be limited in the measurement It can be said that the use of the scale of perception to evaluate social capital, although there are certain limitations but still in the acceptable value In order to overcome this limitation, further studies are needed to further validate the criteria for measuring social capital It can be said that the use of the scale of perception to evaluate social capital, although there are certain limitations but still in the acceptable value In order to overcome this limitation, further studies are needed to further validate the criteria for measuring social capital - Due to size constraints, the authors would like to have research studies to measure the scale and theoretical model for the banking sector with a larger sample size to overcome the above limitations - The dissertation will only study capital activities with the main activity is receiving deposits; Capital use activities with the main activity being lending; Service provision with the main activity is providing services, so it has not evaluated all other activities Therefore, further studies are needed to assess all remaining aspects of each activity in the bank ... and the activities of Bank That''s the space for the researcher Starting from the above mentioned, the author has chosen to study the topic of "Evaluating the impact of social capital to the activities. .. banks in Vietnam, typical case: commercial banks in Ho Chi Minh City - Suggesting policy to help commercial banks in Ho Chi Minh City improve their performance through the use of social capital. .. Chi Minh City The surveyed subjects are leaders (directors/deputy directors of branches) of commercial banks in Ho Chi Minh City Scope: The study is limited to commercial banks operating in Ho