Abstract
This study examines the link between bank restructuring and bank efficiency in Vietnamese banks employing the Data Envelopment Analysis (DEA) and Stochastic Frontier Analysis (SFA) approach. The da...
Highlights
The link between bank restructuring and bank efficiency is an appealing area that draws strong attention from both academic and industry practitioners
Regarding the effect of different restructuring methods, we show that the privatization of state-owned commercial banks, state intervention and mergers and acquisitions (M&A) do not substantially improve efficiency
We find that the privatization of state-owned commercial banks is not effective in improving efficiency because the government still maintains major holdings
Summary
The link between bank restructuring and bank efficiency is an appealing area that draws strong attention from both academic and industry practitioners. Banker, Chang, and Lee (2010) investigate the impact of banking system reforms on bank productivity Their empirical results indicate that the average technical efficiency of Korean commercial banks decreases during the financial crisis of 1997–1998, improves within three years later as bank restructuring occurs, and continues to improve through 2005. Not many studies separate the impact of environment variables from the effect of the bank restructuring approach To address this issue, we use the three stage DEA/SFA method to investigate the impact of bank restructuring on efficiency. Over the period from 2011 to 2013, weak banks are urged to perform restructuring This program is supported and monitored by the government and the State Bank of Vietnam.
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