Van Dan Dang

In the context of the fact that the structure of the Vietnamese banking market has undergone many fluctuations, which has had an impact on banking activities, and the fact that many related studies have been carried out, but the answer is still limited and inconsistent, it is necessary to study the impact of the market structure on banking operations in Vietnam. The paper comprehensively examines the impact of market structure on various aspects of bank performance in Vietnam. The study uses three measures of the structure of the banking industry, namely, the total market share of the largest banks, the squared market share of all banks according to the Herfindahl-Hirshchman index, and the Lerner index on market power (inverse bank competition), to ensure the results are not dependent on any specific measure. The paper applies the two-step system generalized method of moments estimator to conduct regression analysis for a sample of 30 banks from 2007 to 2021. All obtained estimates generally show positive effects on bank performance due to greater market power and higher banking concentration. Concretely, more market power and greater concentration improve bank asset quality, management efficiency, bank profitability, and lending capacity. Overall, the findings of this paper all support the bright side of less competition and more concentration, which is essential to derive policy implications related to supervising competitive environments and stimulating consolidated financial systems.

Acknowledgment
This study is part of Thi Mai Phuong Duong’s PhD dissertation at the Ho Chi Minh University of Banking under the supervision of Van Dan Dang.

Uncertainty has become a critical concern for economists and policymakers worldwide, especially following the global financial crisis and the COVID-19 pandemic, both of which have underscored its significant economic implications. This study delves into the impact of banking uncertainty on loan growth, with a particular emphasis on the moderating role of bank diversification. Diversification is evaluated across three key dimensions: assets, funding sources, and income streams. The analysis is based on a panel dataset comprising 40 Vietnamese commercial banks over the period from 2010 to 2023. To address potential endogeneity, the study employs a dynamic model estimated using the generalized method of moments (GMM). The findings reveal a negative relationship between banking uncertainty and loan growth, indicating that uncertainty adversely affects banks’ lending activities. The results also highlight that banks with higher levels of diversification are better positioned to cushion the negative effects of uncertainty, with this mitigating effect being consistent across all three dimensions of diversification. These insights suggest that diversification strategies can play a vital role in enhancing banks’ resilience to economic shocks and uncertainties.

Acknowledgment
This research is part of Tan Phuc Nguyen’s PhD thesis conducted at the Ho Chi Minh University of Banking under the supervision of Van Dan Dang.