The analysis of technical efficiency of Vietnamese commercial banks in 2007 - 2012 - An application of Dea and Tobit regression model
Abstract
This paper explores the efficiency of 21 commercial banks in Vietnam
using the nonparametric data envelopment approach (DEA) and Tobit regression. The
results indicate that efficiency has significantly declined over the period 2007-2012
meaning Vietnamese banking system was experiencing a volatile period with many
difficulties and challenges while there was not enough professional strategy to solve
the problem. In line with the established literature on emerging markets and
globalization, foreign banks appear to be strong competitors for the domestic
counterparts. However, state-owned banks exhibited greater efficiency than our local
private sector peers. The coefficient claimed that ETA had negative impact while
LDR had positive impact on the operational efficiency of the banks. The study
suggests maintaining the ETA ratio while trying to control the LDR at an appropriate
level may improve the technical efficiency