Incorporating risk into technical efficiency for Vietnam’s and ASEAN banks
Purpose – The purpose of this paper is to incorporate risk in technical efficiency of ASEAN banks in a panel data framework for the period 2000 to 2015. Design/methodology/approach – The directional distance function and semi-parametric framework are employed to estimate efficiency scores for two sc...
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| Format: | Article |
| Language: | English |
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Emerald Publishing
2019-06-01
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| Series: | Journal of Asian Business and Economic Studies |
| Subjects: | |
| Online Access: | https://www.emerald.com/insight/content/doi/10.1108/JABES-10-2018-0083/full/pdf?title=incorporating-risk-into-technical-efficiency-for-vietnams-and-asean-banks |
| _version_ | 1818055478966484992 |
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| author | Tra Thanh Ngo Minh Quang Le Thanh Phu Ngo |
| author_facet | Tra Thanh Ngo Minh Quang Le Thanh Phu Ngo |
| author_sort | Tra Thanh Ngo |
| collection | DOAJ |
| description | Purpose – The purpose of this paper is to incorporate risk in technical efficiency of ASEAN banks in a panel data framework for the period 2000 to 2015. Design/methodology/approach – The directional distance function and semi-parametric framework are employed to estimate efficiency scores for two scenarios, one with only good outputs and the other with a combination of good and bad outputs. Findings – The findings show there is no evidence of technological progress for banks in ASEAN and concerns about the outperformance of Vietnam’s banks. In addition, performance of Vietnam’s banks tends to be distorted by low level of loan loss reserves. Practical implications – To reflect the true performance and shorten the period of removing bad assets, the State Bank of Vietnam can request banks in Vietnam to book more loan loss reserves. Originality/value – By examining such a new approach, this study makes an early attempt to incorporate credit risk into the banking efficiency in ASEAN region. |
| first_indexed | 2024-12-10T12:13:36Z |
| format | Article |
| id | doaj.art-123e2faea4a84ef4a211f35813f88d5a |
| institution | Directory Open Access Journal |
| issn | 2515-964X |
| language | English |
| last_indexed | 2024-12-10T12:13:36Z |
| publishDate | 2019-06-01 |
| publisher | Emerald Publishing |
| record_format | Article |
| series | Journal of Asian Business and Economic Studies |
| spelling | doaj.art-123e2faea4a84ef4a211f35813f88d5a2022-12-22T01:49:16ZengEmerald PublishingJournal of Asian Business and Economic Studies2515-964X2019-06-0126121610.1108/JABES-10-2018-0083619653Incorporating risk into technical efficiency for Vietnam’s and ASEAN banksTra Thanh Ngo0Minh Quang Le1Thanh Phu Ngo2The University of Economics and Law, Ho Chi Minh, VietnamQueensland University of Technology, Brisbane, AustraliaFaculty of Finance and Banking, University of Economics and Law, Ho Chi Minh, VietnamPurpose – The purpose of this paper is to incorporate risk in technical efficiency of ASEAN banks in a panel data framework for the period 2000 to 2015. Design/methodology/approach – The directional distance function and semi-parametric framework are employed to estimate efficiency scores for two scenarios, one with only good outputs and the other with a combination of good and bad outputs. Findings – The findings show there is no evidence of technological progress for banks in ASEAN and concerns about the outperformance of Vietnam’s banks. In addition, performance of Vietnam’s banks tends to be distorted by low level of loan loss reserves. Practical implications – To reflect the true performance and shorten the period of removing bad assets, the State Bank of Vietnam can request banks in Vietnam to book more loan loss reserves. Originality/value – By examining such a new approach, this study makes an early attempt to incorporate credit risk into the banking efficiency in ASEAN region.https://www.emerald.com/insight/content/doi/10.1108/JABES-10-2018-0083/full/pdf?title=incorporating-risk-into-technical-efficiency-for-vietnams-and-asean-banksriskbank efficiencydirectional distance functionsemi-parametric estimation of stochastic frontier models |
| spellingShingle | Tra Thanh Ngo Minh Quang Le Thanh Phu Ngo Incorporating risk into technical efficiency for Vietnam’s and ASEAN banks Journal of Asian Business and Economic Studies risk bank efficiency directional distance function semi-parametric estimation of stochastic frontier models |
| title | Incorporating risk into technical efficiency for Vietnam’s and ASEAN banks |
| title_full | Incorporating risk into technical efficiency for Vietnam’s and ASEAN banks |
| title_fullStr | Incorporating risk into technical efficiency for Vietnam’s and ASEAN banks |
| title_full_unstemmed | Incorporating risk into technical efficiency for Vietnam’s and ASEAN banks |
| title_short | Incorporating risk into technical efficiency for Vietnam’s and ASEAN banks |
| title_sort | incorporating risk into technical efficiency for vietnam s and asean banks |
| topic | risk bank efficiency directional distance function semi-parametric estimation of stochastic frontier models |
| url | https://www.emerald.com/insight/content/doi/10.1108/JABES-10-2018-0083/full/pdf?title=incorporating-risk-into-technical-efficiency-for-vietnams-and-asean-banks |
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