Evaluating the Efficiency of Vietnamese Banking System: An Application Using Data Envelopment Analysis

15 Pages Posted: 18 Jun 2010

See all articles by Thanh Ngo

Thanh Ngo

Massey University - School of Aviation

Date Written: May 10, 2010

Abstract

Over the last twenty years in Vietnam, the financial system in general and the banking system in particular had been transferred from a monopoly system into a diversified system which allows all participants to compete fairly and effectively.

Within these past years, the banking system in Vietnam did gradually developed in number of banking institutions, size of the banking sector in the economy, amount of credits for the economy, and amount of other banking services as well.

Along with the development of the banking system in number, size, asset value, deposit, credit and debit account, ATM/POS, interest rates, etc. which attracted more and more customers using the banking’ services; the efficiency of the banking system also has been increasing.

So far, there is still a lack of research on the efficiency of the banking sector in Vietnam over the decades. Several researches were conducted, however, due to the data limitation, these researches were just small steps at the big front gate. This paper, which focuses on evaluating the efficiency of bigger sample size of Vietnamese commercial banks in the year of 2008, tends to make a contribution to this progress.

The DEA approach allows this paper to evaluate the efficiency of 22 Vietnamese commercial banks in using their inputs in 2008 (these banks were ranked top in the banking industry in Vietnam – VNR500 in 2009). After analyzing, the research comes to a conclusion that although the efficiency of these banks is averagely high, however, there is still an opportunity to improve this indicator.

Keywords: Data envelopment analysis, Vietnam, bank, efficiency

Suggested Citation

Ngo, Thanh, Evaluating the Efficiency of Vietnamese Banking System: An Application Using Data Envelopment Analysis (May 10, 2010). Available at SSRN: https://ssrn.com/abstract=1626009 or http://dx.doi.org/10.2139/ssrn.1626009

Thanh Ngo (Contact Author)

Massey University - School of Aviation ( email )

United States

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