Competition and bank financial stability: evidence from an emerging economy

Figures & data

Table 1. Variables definition for estimating bank stability efficiency.

Variable	Definition
$Z-\mathit{\text{scor}}{e}_{i,t}$	The index is obtained from Equation (1)(1) $$Z-\mathit{\text{scor}}{e}_{i,t}=\frac{{\mathit{\text{ROA}}}_{i,t}+E_{i,t}/{\mathit{\text{TA}}}_{i,t}}{\sigma {\mathit{\text{ROA}}}_{i,t}}$$(1)
$Q_{\mathit{\text{it}}}$ (output)	Total assets
$W_1$ (Input price of deposits)	The ratio of interest expenses to total deposits
$W_2$ (Input price of labour)	The proportion of personnel expenses/number of employees
$W_3$ (Input price of physical capital)	The proportion of other operating cost to fixed assets
$Z_1$m (Fixed net put 1)	Fixed assets
$Z_2$m (Fixed net put 2)	Total equity
$\mathit{\text{Trend}}$	Technical change
${\epsilon }_i$	Error term

Source: Author’s summary.

Table 2. The descriptive statistics of variables.

Variables	Definitions	Obs	Mean	Std. Dev	Min	Max
ZW	The stability efficiency scores	332	0.318	0.173	0.033	0.895
CMP	Conventional Lerner index	339	0.692	0.058	0.267	0.892
AMP	Efficiency-adjusted Lerner index	339	0.801	0.038	0.506	0.930
SIZE	The natural logarithm of total assets	342	32.227	1.313	28.420	34.989
ROA	Returns on assets	341	0.909	0.805	−5.512	5.952
LATA	Liquid assets to total assets	339	0.322	0.124	0.049	0.816
CAP	Total equity to total assets	339	0.094	0.052	0.021	0.462
GDP	The growth rate	350	0.060	0.011	0.029	0.071
INF	The annual inflation rate	350	0.073	0.061	0.006	0.231

Source: Author’s summary.

Table 3. The correlation matrix of variables.

	ZW	CMP	AMP	SIZE	ROA	LATA	CAP	GDP	INF
ZW	1
CMP	−0.256	1
AMP	−0.256	0.994	1
SIZE	−0.191	−0.243	−0.162	1
ROA	−0.050	0.680	0.695	−0.095	1
LATA	0.059	0.331	0.323	−0.277	0.299	1
CAP	0.069	0.372	0.328	−0.649	0.440	0.209	1
GDP	0.031	0.125	0.127	0.008	−0.069	−0.003	−0.039	1
INF	0.258	−0.099	−0.116	−0.374	0.269	0.243	0.383	−0.107	1

Source: Author’s summary.

Table 4. Baseline regression results of competition on Vietnamese bank stability efficiency.

Variable	ZW	ZW
CMP	−3.354***
	(0.564)
AMP		−5.088***
		(0.886)
SIZE	0.078***	0.065***
	(0.021)	(0.020)
ROA	0.158***	0.159***
	(0.043)	(0.044)
LATA	0.339**	0.344**
	(0.150)	(0.152)
CAP	−0.829	−0.833
	(0.462)	(0.464)
GDP	3.823*	3.87*
	(1.982)	(1.971)
INF	−0.395	−0.334
	(0.346)	(0.345)
Constant	4.731	6.041
	(0.947)	(1.144)
No.of Obs	328	328
Pseudo R2	0.246	0.231

Note: This table presents the results of main equation. Robust standard errors are in parentheses. *, ** and ***Significant at 10, 5 and 1% levels, respectively.

Table 5. The results of considering the private banks and crisis.

Variable	PRIVATE		CRISIS
	ZW	ZW	ZW	ZW
CMP	−3.023***		−2.047***
	(0.792)		(0.339)
AMP		−4.061***		−2.967***
		(1.172)		(0.527)
SIZE	−0.053**	−0.042*	−0.042***	−0.032**
	(0.026)	(0.025)	(0.013)	(0.012)
ROA	0.147***	0.131**	0.085***	0.078***
	(0.053)	(0.052)	(0.027)	(0.027)
LATA	0.318**	0.315*	0.135	0.136
	(0.160)	(0.162)	(0.091)	(0.092)
CAP	−0.814	−0.839	−0.282	−0.257
	(0.507)	(0.513)	(0.295)	(0.297)
GDP	2.986	2.737	2.381**	2.316**
	(2.196)	(2.192)	(1.102)	(1.108)
INF	−0.117	0.101	−0.070	−0.033
	(0.430)	(0.429)	(0.226)	(0.229)
GFC			0.073	0.035
			(0.047)	(0.141)
Constant	3.726	4.573	2.851	3.470
	(1.163)	(1.417)	(0.559)	(0.658)
No.of Obs	276	276	328	328
Pseudo R2	0.140	0.126	1.157	1.090

Note: This table presents the results of main equation. Robust standard errors are in parentheses. *, ** and *** Significant at 10, 5 and 1% levels, respectively.

Table 6. The results of considering the subsamples.

Variable	Small banks		Large banks
	ZW	ZW	ZW	ZW
CMP	−2.001*		−2.972***
	(1.200)		(0.788)
AMP		−2.157*		−5.071***
		(1.247)		(1.259)
SIZE	−0.069	−0.050	−0.220***	−0.209***
	(0.046)	(0.032)	(0.062)	(0.059)
ROA	0.134*	0.107**	−0.029	0.001
	(0.072)	(0.053)	(0.094)	(0.093)
LATA	0.557**	0.451**	−0.473	−0.448
	(0.243)	(0.177)	(0.293)	(0.285)
CAP	−0.759	−0.510	−6.001	−5.711
	(0.599)	(0.430)	(1.854)	(1.796)
GDP	0.305	−0.354	8.653***	8.763***
	(3.797)	(2.605)	(2.986)	(2.914)
INF	0.146	0.025	−1.213	−1.241
	(0.508)	(0.350)	(0.708)	(0.685)
Constant	3.758	3.469	9.636	11.233
	(1.972)	(1.667)	(2.385)	(2.595)
No.of Obs	165	165	163	163
Pseudo R2	0.226	0.235	0.700	0.719

Note: This table presents the results of main equation. Robust standard errors are in parentheses. *, ** and *** Significant at 10, 5 and 1% levels, respectively.

Table 7. The results of GMM, NPL and Z-scores.

Variables	ZW	ZW	ZSCORE	ZSCORE	NPL	NPL
πt-1	0.993***	0.992***	0.163***	0.161***	0.323***	0.215***
	(0.006)	(0.006)	(0.018)	(0.018)	(0.099)	(0.062)
CMP	−0.100***		−7.915***		15.235***
	(0.022)		(1.673)		(5.151)
AMP		−0.139***		−11.895***		19.700**
		(0.033)		(2.510)		(7.573)
SIZE	−0.002***	−0.002***	−0.035	−0.038	0.300	−0.009
	(0.001)	(0.001)	(0.047)	(0.051)	(0.268)	(0.253)
ROA	0.005***	0.005***	1.609***	1.610***	−1.094***	−1.010***
	(0.001)	(0.001)	(0.072)	(0.070)	(0.292)	(0.198)
LATA	−0.007	−0.007	−0.372	−0.351	1.951	2.626
	(0.004)	(0.005)	(0.375)	(0.392)	(1.247)	(1.163)
CAP	−0.046	−0.045	−3.093	−3.066	19.252	14.382
	(0.017)	(0.018)	(0.703)	(0.670)	(3.496)	(2.1362)
GDP	0.090***	0.081***	5.154***	4.720**	−31.333***	−24.080***
	(0.014)	(0.014)	(1.873)	(1.852)	(4.044)	(6.420)
INF	−0.030***	−0.029***	−0.017	−0.165	6.902***	5.206***
	(0.007)	(0.008)	(0.513)	(0.502)	(1.154)	(0.924)
Constant	0.132	0.177	6.827	11.021	−18.810	−13.977
	(0.033)	(0.044)	(1.752)	(2.575)	(10.563)	(11.014)
AR1 (p value)	0.044	0.038	0.038	0.039	0.021	0.084
AR2 (p value)	0.108	0.148	0.175	0.169	0.136	0.100
Hansen test (p value)	0.786	0.750	0.716	0.732	0.575	0.740
No.of Obs	299	299	317	317	274	274
No.of groups	25	25	25	25	25	25

Note: This table presents the results of main equation. Robust standard errors are in parentheses. *, ** and *** Significant at 10, 5 and 1% levels, respectively.

Data availability statement

The data supporting the findings of this study are available from the corresponding author upon reasonable request.