Impact of Capital Structure on Risk-taking of Vietnamese Commercial Banks

Abstract

This study assesses the impact of capital structure on the risk-taking of Vietnamese commercial banks in the period 2012–2020. The study uses the system GMM regression model (SGMM) to estimate the results based on panel data collected by year from financial statements of 30 Vietnamese commercial banks. The variable representing bank risk-taking is Z-score; the variables representing the capital structure of commercial banks are customer deposits and non-deposit liabilities. Research results show that customer deposits and non-deposit liabilities increase the risk-taking of commercial banks. From the findings of this study, bank administrators will have a basis to decide on the appropriate capital structure and bring value to the bank.