THE IMPACT OF MARKET POWER ON THE PERFORMANCE OF COMMERCIAL BANKING IN VIETNAM

Abstract

The research used Stochasitic Frontier Analysis (SFA) to quantify the Technical Efficiency of 27 commercial banks in Viet Nam in the period 2012-2019. The results shows that the that commercial banks’ effectiveness in using external resource reached up to 79,7%. At the same time, using cost function, the research estimated Lerner Index of Vietnamese commercial banks reached 52,8%, above many countries in the region. The research used Tobit model to assess the impact of the factor market power to the banks’s effectiveness.