Multimarket Contact and Risk-Adjusted Profitability in the Banking Sector: Empirical Evidence from Vietnam

• 발행기관: 한국유통과학회
• 저자명: Oanh Le Kieu DAO Tuyen Thi Ngoc HO Hac Dinh LE Nga Quynh DUONG
• 간행물 정보: 『The Journal of Asian Finance, Economics and Business(JAFEB)』Vol. 8 No.3, 1171~1180쪽, 전체 10쪽
• 주제분류: 경제경영 > 경제학
• 파일형태: PDF
• 발행일자: 2021.03.30

영문 초록

This study aims to investigate the impact of the multimarket contract on risk-adjusted profitability. Risk-adjusted profitability is measured in terms of risk-adjusted return on assets. This study employs dynamic panel data of 27 commercial banks in Vietnam using the GMM estimator to test the multimarket contact hypothesis in the Vietnamese banking sector. The results show that there is a negative impact of multimarket contact on the profitability of banks. Multimarket contact, deposit to asset ratio, non-interest income to total income, GDP growth rate, Worldwide Governance Indicator (WGI), and operating cost to assets are the major determinants of risk-adjusted profitability of commercial banks. Our main findings show that Vietnamese banks’ focus to increase the multimarket contact may lead to lower profitability and there is evidence that supports theory predictions, since the average number of contacts among banks, bank size, and capitalization are positively related to risk-adjusted profitability. The study has policy implications for commercial banks in that they should not only focus on interest as a source of income and diversify their income source from non-interest income as well since it helps to improve risk-adjusted profitability for them.

목차

1. Introduction

2. Literature Review

3. Multimarket Contact Measures

4. The Empirical Approach

5. Conclusions

References

키워드

Multimarket Contact Banking Performance Risk-Adjusted ROA GMM System Estimator