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The impact of multimarket contacts on bank stability in Vietnam

Tu DQ Le (University of Economics and Law, VNU-HCM, Vietnam)
Son H. Tran (University of Economics and Law, VNU-HCM, Vietnam)
Liem T. Nguyen (University of Economics and Law, VNU-HCM, Vietnam)

Pacific Accounting Review

ISSN: 0114-0582

Article publication date: 3 May 2019

Issue publication date: 8 October 2019

Abstract

Purpose

The purpose of this study is to investigate the impact of multimarket contacts on bank stability in the Vietnamese banking system between 2006 and 2015.

Design/methodology/approach

The system generalized method of moments proposed by Arellano and Bover (1995) is used to examine the relationship between multimarket contacts and bank stability.

Findings

The findings show that multimarket contacts among Vietnamese commercial banks improve bank stability. In addition, more x-efficient banks appear to be more stable. The same is true for banks with less holding liquid assets, for those with less excessive lending, for smaller banks, for those with the greater level of intermediation and for those with a higher level of foreign ownership. Listed banks are found to be less-risk taking than unlisted banks.

Originality/value

This study is the first attempt to examine the relationship between multimarket contacts and bank stability in an emerging market in the Asia-Pacific region.

Keywords

Acknowledgements

This research is funded by University of Economics and Law, Vietnam National University, Ho Chi Minh City, Vietnam.

Citation

Le, T.D., Tran, S.H. and Nguyen, L.T. (2019), "The impact of multimarket contacts on bank stability in Vietnam", Pacific Accounting Review, Vol. 31 No. 3, pp. 336-357. https://doi.org/10.1108/PAR-04-2018-0033

Publisher

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Emerald Publishing Limited

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