Open AccessOwnership structure and risk of commercial banks in Vietnam
Author(s) -
Pham Tien Minh,
Bui Huy Hai Bich
Publication year - 2020
Publication title -
khoa học và công nghệ: kinh tế - luật - quản lý
Language(s) - English
Resource type - Journals
ISSN - 2588-1051
DOI - 10.32508/stdjelm.v3isi.606
Subject(s) - business , panel data , foreign ownership , shareholder , financial system , econometrics , economics , corporate governance , foreign direct investment , finance , macroeconomics
This study examines the impact of ownership structure on bank risk. The former is classified into four types, including concentrated, institutional, foreign, and government, while the latter is proxied by the Z-score (an inverse measure of risk). The Generalized Least Squares (GLS), which controls for heteroskedasticity and autocorrelation problems, is employed to analyze an unbalanced panel data set including 21 joint-stock commercial banks in Vietnam from 2010 to 2018. We further investigate the moderating effects of market discipline (proxied by variable listed) on the relationship between ownership structure and bank risk. The results suggest that there is a negative association between three proxies of ownership structure (ownership concentration, institutional ownership, and government ownership) and bank risk and that foreign ownership does not have any significant relationship on the risk of the bank in the direct relationship models. However, the results for the models where interaction variables are included show that foreign shareholders help improve bank stability and reduce risk in listed banks. In addition, the relationship between institutional ownership and bank risk is reinforced for listed banks, while the relationships between the other two (concentration and government) and bank risk are not influenced by the listing status.