Geographic expansion, income diversification, and bank stability: Evidence from Vietnam

References

• Acharya, V. V., Hasan, I., & Saunders, A. (2006). Should banks be diversified? Evidence from individual bank loan portfolios. The Journal of Business, 79(3), 1355–22. https://doi.org/https://doi.org/10.1086/500679
   Google Scholar
• Agusman, A., Cullen, G. S., Gasbarro, D., Monroe, G. S., & Zumwalt, J. K. (2014). Government intervention, bank ownership and risk-taking during the Indonesian financial crisis. Pacific-Basin Finance Journal, 30, 114–131. https://doi.org/https://doi.org/10.1016/j.pacfin.2014.07.003
   Google Scholar
• Altunbas, Y., Carbo, S., Gardener, E. P. M., & Molyneux, P. (2007). Examining the relationships between capital, risk and efficiency in European banking. European Financial Management, 13(1), 49–70. https://doi.org/https://doi.org/10.1111/j.1468-036X.2006.00285.x
   Google Scholar
• Arellano, M., & Bond, S. (1991). Some tests of specification for panel data: Monte Carlo evidence and an application to employment equations. The Review of Economic Studies, 58(2), 277–297. https://doi.org/https://doi.org/10.2307/2297968
   Google Scholar
• Arellano, M., & Bover, O. (1995). Another look at the instrumental variable estimation of error-components models. Journal of Econometrics, 68(1), 29–51. https://doi.org/https://doi.org/10.1016/0304-4076(94)01642-D
   Google Scholar
• Assaf, A. G., Barros, C. P., & Matousek, R. (2011). Productivity and efficiency analysis of Shinkin banks: Evidence from bootstrap and Bayesian approaches. Journal of Banking & Finance, 35(2), 331–342. https://doi.org/https://doi.org/10.1016/j.jbankfin.2010.08.017
   Google Scholar
• Baele, L., De Jonghe, O., & Vander Vennet, R. (2007). Does the stock market value bank diversification? Journal of Banking & Finance, 31(7), 1999–2023. https://doi.org/https://doi.org/10.1016/j.jbankfin.2006.08.003
   Google Scholar
• Banker, R. D., Charnes, A., & Cooper, W. W. (1984). Some models for estimating technical and scale inefficiencies in data envelopment analysis. Management Science, 30(9), 1078–1092. https://doi.org/https://doi.org/10.1287/mnsc.30.9.1078
   Google Scholar
• Batten, J. A., & Vo, X. V. (2016). Bank risk shifting and diversification in an emerging market. Risk Management, 18(4), 217–235. https://doi.org/https://doi.org/10.1057/s41283-016-0008-2
   Google Scholar
• Beck, T., Demirgüç-Kunt, A., & Levine, R. (2006). Bank concentration, competition, and crises: First results. Journal of Banking & Finance, 30(5), 1581–1603. https://doi.org/https://doi.org/10.1016/j.jbankfin.2005.05.010
   Google Scholar
• Berger, A. N., & Bouwman, C. H. (2009). Bank liquidity creation. Review of Financial Studies, 22(9), 3779–3837. https://doi.org/https://doi.org/10.1093/rfs/hhn104
   Google Scholar
• Berger, A. N., & DeYoung, R. (1997). Problem loans and cost efficiency in commercial banks. Journal of Banking and Finance, 21(6), 849–870. https://doi.org/https://doi.org/10.1016/S0378-4266(97)00003-4
   Google Scholar
• Berger, A. N., Klapper, L. F., & Turk-Ariss, R. (2009). Bank competition and financial stability. Journal of Financial Services Research, 35(2), 99–118. https://doi.org/https://doi.org/10.1007/s10693-008-0050-7
   Google Scholar
• Berger, A. N., Miller, N. H., Petersen, M. A., Rajan, R. G., & Stein, J. C. (2005). Does function follow organizational form? Evidence from the lending practices of large and small banks. Journal of Financial Economics, 76(2), 237–269. https://doi.org/https://doi.org/10.1016/j.jfineco.2004.06.003
   Google Scholar
• Bordeleau, É., & Graham, C. (2010). The impact of liquidity on bank profitability. Ontario: Working Paper 2010–2038, Bank of Canada.
   Google Scholar
• Bourke, P. (1989). Concentration and other determinants of bank profitability in Europe, North America and Australia. Journal of Banking & Finance, 13(1), 65–79. https://doi.org/https://doi.org/10.1016/0378-4266(89)90020-4
   Google Scholar
• Boyd, J. H., & De Nicolo, G. (2005). The theory of bank risk taking and competition revisited. The Journal of Finance, 60(3), 1329–1343. https://doi.org/https://doi.org/10.1111/j.1540-6261.2005.00763.x
   Google Scholar
• Calmès, C., & Liu, Y. (2009). Financial structure change and banking income: A Canada–U.S. comparison. Journal of International Financial Markets, Institutions and Money, 19(1), 128–139. https://doi.org/http://dx.doi.org/10.1016/j.intfin.2007.09.003
   Google Scholar
• Cameron, A. C., & Pravin, K. T. (2010). Microeconometrics using Stata, revised edition (2nd revised ed.). Stata Press.
   Google Scholar
• Chiorazzo, V., Milani, C., & Salvini, F. (2008). Income diversification and bank performance: Evidence from Italian banks. Journal of Financial Services Research, 33(3), 181–203. https://doi.org/https://doi.org/10.1007/s10693-008-0029-4
   Google Scholar
• Demirgüç-Kunt, A., & Huizinga, H. (2010). Bank activity and funding strategies: The impact on risk and returns. Journal of Financial Economics, 98(3), 626–650. https://doi.org/https://doi.org/10.1016/j.jfineco.2010.06.004
   Google Scholar
• Deng, S. E., & Elyasiani, E. (2008). Geographic diversification, bank holding company value, and risk. Journal of Money, Credit and Banking, 40(6), 1217–1238. https://doi.org/https://doi.org/10.1111/j.1538-4616.2008.00154.x
   Google Scholar
• DeYoung, R., Evanoff, D. D., & Molyneux, P. (2009). Mergers and acquisitions of financial institutions: A review of the post-2000 literature. Journal of Financial Services Research, 36(2–3), 87–110. https://doi.org/https://doi.org/10.1007/s10693-009-0066-7
   Google Scholar
• DeYoung, R., & Rice, T. (2004). Noninterest income and financial performance at US commercial banks. Financial Review, 39(1), 101–127. https://doi.org/https://doi.org/10.1111/j.0732-8516.2004.00069.x
   Google Scholar
• DeYoung, R., & Roland, K. P. (2001). Product mix and earnings volatility at commercial banks: Evidence from a degree of total leverage model. Journal of Financial Intermediation, 10(1), 54–84. https://doi.org/https://doi.org/10.1006/jfin.2000.0305
   Google Scholar
• Diamond, D. W. (1984). Financial intermediation and delegated monitoring. The Review of Economic Studies, 51(3), 393–414. https://doi.org/https://doi.org/10.2307/2297430
   Google Scholar
• Dyson, R. G., & Shale, E. (2010). Data envelopment analysis, operational research and uncertainty. Journal of the Operational Research Society, 61(1), 25–34. https://doi.org/https://doi.org/10.1057/jors.2009.145
   Google Scholar
• Ehsan, S., & Javid, A. Y. (2018). Bank ownership structure, regulations and risk-taking: Evidence from commercial banks in Pakistan. Portuguese Economic Journal, 17(3), 185–209. https://doi.org/https://doi.org/10.1007/s10258-018-0147-3
   Google Scholar
• ElBannan, M. A. (2015). Do consolidation and foreign ownership affect bank risk taking in an emerging economy? An empirical investigation. Managerial Finance, 41(9), 874–907. https://doi.org/https://doi.org/10.1108/MF-12-2013-0342
   Google Scholar
• Elsas, R., Hackethal, A., & Holzhäuser, M. (2010). The anatomy of bank diversification. Journal of Banking & Finance, 34(6), 1274–1287. https://doi.org/https://doi.org/10.1016/j.jbankfin.2009.11.024
   Google Scholar
• Farrell, M. J. (1957). The measurement of productive efficiency. Journal of the Royal Statistical Society. Series A (General), 120(3), 253–290. https://doi.org/https://doi.org/10.2307/2343100
   Google Scholar
• Fiordelisi, F., Marques-Ibanez, D., & Molyneux, P. (2011). Efficiency and risk in European banking. Journal of Banking & Finance, 35(5), 1315–1326. https://doi.org/http://dx.doi.org/10.1016/j.jbankfin.2010.10.005
   Google Scholar
• Frame, W. S., & White, L. J. (2004). Empirical studies of financial innovation: Lots of talk, little action? Journal of Economic Literature, 42(1), 116–144. https://doi.org/https://doi.org/10.1257/002205104773558065
   Google Scholar
• Froot, K. A., & Stein, J. C. (1998). Risk management, capital budgeting, and capital structure policy for financial institutions: An integrated approach. Journal of Financial Economics, 47(1), 55–82. https://doi.org/https://doi.org/10.1016/S0304-405X(97)00037-8
   Google Scholar
• Fu, X. M., Lin, Y. R., & Molyneux, P. (2015). Bank capital and liquidity creation in Asia Pacific. Economic Inquiry, 54(2), 966–993. https://doi.org/https://doi.org/10.1111/ecin.12308
   Google Scholar
• Gallo, J. G., Apilado, V. P., & Kolari, J. W. (1996). Commercial bank mutual fund activities: Implications for bank risk and profitability. Journal of Banking & Finance, 20(10), 1775–1791. https://doi.org/https://doi.org/10.1016/S0378-4266(96)00024-6
   Google Scholar
• García-Herrero, A., Gavilá, S., & Santabárbara, D. (2009). What explains the low profitability of Chinese banks? Journal of Banking & Finance, 33(11), 2080–2092. https://doi.org/https://doi.org/10.1016/j.jbankfin.2009.05.005
   Google Scholar
• Goetz, M. R., Laeven, L., & Levine, R. (2016). Does the geographic expansion of banks reduce risk? Journal of Financial Economics, 120(2), 346–362. https://doi.org/http://dx.doi.org/10.1016/j.jfineco.2016.01.020
   Google Scholar
• Gugler, K., & Weigand, J. (2003). Is ownership really endogenous? Applied Economics Letters, 10(8), 483–486. https://doi.org/https://doi.org/10.1080/1350485032000095357
   Google Scholar
• Hughes, J. P., & Mester, L. J. (1998). Bank capitalization and cost: Evidence of scale economies in risk management and signaling. Review of Economics and Statistics, 80(2), 314–325. https://doi.org/https://doi.org/10.1162/003465398557401
   Google Scholar
• Kasman, S., & Kasman, A. (2016). Multimarket contact, market power and financial stability in the Turkish banking industry. Empirical Economics, 50(2), 361–382. https://doi.org/https://doi.org/10.1007/s00181-015-0936-9
   Google Scholar
• Klein, P. G., & Saidenberg, M. R. (2000). Diversification, organization, and efficiency: Evidence from bank holding companies. In P. T. Harker & S. A. Zenios (Eds.), Performance of Financial Institutions: Efficiency, Innovation, Regulation (pp. 153–174). Cambridge University Press.
   Google Scholar
• Köhler, M. (2015). Which banks are more risky? The impact of business models on bank stability. Journal of Financial Stability, 16, 195–212. https://doi.org/http://dx.doi.org/10.1016/j.jfs.2014.02.005
   Google Scholar
• Kwast, M. L. (1989). The impact of underwriting and dealing on bank returns and risks. Journal of Banking & Finance, 13(1), 101–125. https://doi.org/https://doi.org/10.1016/0378-4266(89)90022-8
   Google Scholar
• Laeven, L., & Levine, R. (2007). Is there a diversification discount in financial conglomerates? Journal of Financial Economics, 85(2), 331–367. https://doi.org/https://doi.org/10.1016/j.jfineco.2005.06.001
   Google Scholar
• Le, T. D. (2017a). The efficiency effects of bank mergers: An analysis of case studies in Vietnam. Risk Governance & Control, 7(1), 61–70. https://doi.org/http://dx.doi.org/10.22495/rgcv7i1art8
   Google Scholar
• Le, T. D. (2017b). The interrelationship between net interest margin and non-interest income: Evidence from Vietnam. International Journal of Managerial Finance, 13(5), 521–540. https://doi.org/https://doi.org/10.1108/IJMF-06-2017-0110
   Google Scholar
• Le, T. D. (2018). Bank risk, capitalisation and technical efficiency in the Vietnamese banking system. Australasian Accounting Business & Finance Journal, 12(3), 42–61. https://doi.org/http://dx.doi.org/10.14453/aabfj.v12i3.4
   Google Scholar
• Le, T. D. (2019). The interrelationship between liquidity creation and bank capital in Vietnamese banking. Managerial Finance, 45(2), 331–347. https://doi.org/https://doi.org/10.1108/MF-09-2017-0337
   Google Scholar
• Le, T. D. (2020a) Can foreign ownership reduce bank risk? Evidence from Vietnam. University of Economics & Law, VNU-HCM, Vietnam: Working Paper, Institute for Development and Research in Banking Technology.
   Google Scholar
• Le, T. D. (2020b). The interrelationship among bank profitability, bank stability, and loan growth: Evidence from Vietnam. Cogent Business & Management, 7(1), 1–18. https://doi.org/https://doi.org/10.1080/23311975.2020.1840488
   Google Scholar
• Le, T. D. (2020c). Market discipline and the regulatory change: Evidence from Vietnam. Cogent Economics & Finance, 8(1), 1–12. https://doi.org/https://doi.org/10.1080/23322039.2020.1757801
   Google Scholar
• Le, T. D. (2020d). Multimarket contacts and bank profitability: Do diversification and bank ownership matter? Cogent Economics & Finance, 8(1), 1–21. https://doi.org/https://doi.org/10.1080/23322039.2020.1849981
   Google Scholar
• Le, T. D., & Ngo, T. (2020). The determinants of bank profitability: A cross-country analysis. Central Bank Review, 20(2), 65–73. https://doi.org/https://doi.org/10.1016/j.cbrev.2020.04.001
   Google Scholar
• Le, T. D., Nguyen, V. T., & Tran, S. H. (2020). Geographic loan diversification and bank risk: A cross-country analysis. Cogent Economics & Finance, 8(1), 1–20. https://doi.org/https://doi.org/10.1080/23322039.2020.1809120
   Google Scholar
• Le, T. D., Tran, S. H., & Nguyen, L. T. (2019). The impact of multimarket contacts on bank stability in Vietnam. Pacific Accounting Review, 31(3), 336–357. https://doi.org/https://doi.org/10.1108/PAR-04-2018-0033
   Google Scholar
• Le, T. D., Tran, S. H., & Nguyen, L. T. (Forthcoming). Loan loss provisions, earnings management, capital management, and signalling: The case of Vietnamese banks. Afro-Asian Journal of Finance and Accounting.
   Google Scholar
• Lee, C. C., Chen, P. F., & Zeng, J. H. (2020). Bank income diversification, asset correlation and systemic risk. South African Journal of Economics, 88(1), 71–89. https://doi.org/https://doi.org/10.1111/saje.12235
   Google Scholar
• Lee, C.C., Yang, S.J., & Chang, C.H. (2014). Non-interest income, profitability, and risk in banking industry: A cross-country analysis. The North American Journal of Economics and Finance, 27, 48–67. https://doi.org/http://dx.doi.org/10.1016/j.najef.2013.11.002
   Google Scholar
• Lepetit, L., Nys, E., Rous, P., & Tarazi, A. (2008). Bank income structure and risk: An empirical analysis of European banks. Journal of Banking & Finance, 32(8), 1452–1467. https://doi.org/https://doi.org/10.1016/j.jbankfin.2007.12.002
   Google Scholar
• Lepetit, L., & Strobel, F. (2013). Bank insolvency risk and time-varying Z-score measures. Journal of International Financial Markets, Institutions and Money, 25(Suppl. C), 73–87. https://doi.org/https://doi.org/10.1016/j.intfin.2013.01.004
   Google Scholar
• Lepetit, L., & Strobel, F. (2015). Bank insolvency risk and Z-score measures: A refinement. Finance Research Letters, 13(Suppl. C), 214–224. https://doi.org/https://doi.org/10.1016/j.frl.2015.01.001
   Google Scholar
• Li, L., & Zhang, Y. (2013). Are there diversification benefits of increasing noninterest income in the Chinese banking industry? Journal of Empirical Finance, 24, 151–165. https://doi.org/http://dx.doi.org/10.1016/j.jempfin.2013.10.004
   Google Scholar
• Lin, X., & Zhang, Y. (2009). Bank ownership reform and bank performance in China. Journal of Banking & Finance, 33(1), 20–29. https://doi.org/https://doi.org/10.1016/j.jbankfin.2006.11.022
   Google Scholar
• Liu, H., Molyneux, P., & Nguyen, L. H. (2012). Competition and risk in South East Asian commercial banking. Applied Economics, 44(28), 3627–3644. https://doi.org/https://doi.org/10.1080/00036846.2011.579066
   Google Scholar
• Luo, X. (2003). Evaluating the profitability and marketability efficiency of large banks: An application of data envelopment analysis. Journal of Business Research, 56(8), 627–635. https://doi.org/https://doi.org/10.1016/S0148-2963(01)00293-4
   Google Scholar
• Mercieca, S., Schaeck, K., & Wolfe, S. (2007). Small European banks: Benefits from diversification? Journal of Banking & Finance, 31(7), 1975–1998. https://doi.org/http://dx.doi.org/10.1016/j.jbankfin.2007.01.004
   Google Scholar
• Meslier, C., Morgan, D. P., Samolyk, K., & Tarazi, A. (2016). The benefits and costs of geographic diversification in banking. Journal of International Money and Finance, 69, 287–317. https://doi.org/https://doi.org/10.1016/j.jimonfin.2016.07.007
   Google Scholar
• Meslier, C., Tacneng, R., & Tarazi, A. (2014). Is bank income diversification beneficial? Evidence from an emerging economy. Journal of International Financial Markets, Institutions and Money, 31, 97–126. https://doi.org/http://dx.doi.org/10.1016/j.intfin.2014.03.007
   Google Scholar
• Moudud-Ul-Huq, S., Ashraf, B. N., Gupta, A. D., & Zheng, C. (2018). Does bank diversification heterogeneously affect performance and risk-taking in ASEAN emerging economies? Research in International Business and Finance, 46, 342–362. https://doi.org/https://doi.org/10.1016/j.ribaf.2018.04.007
   Google Scholar
• Nguyen, J. (2012). The relationship between net interest margin and noninterest income using a system estimation approach. Journal of Banking & Finance, 36(9), 2429–2437. https://doi.org/http://dx.doi.org/10.1016/j.jbankfin.2012.04.017
   Google Scholar
• Nguyen, M., Perera, S., & Skully, M. (2016). Bank market power, ownership, regional presence and revenue diversification: Evidence from Africa. Emerging Markets Review, 27, 36–62. https://doi.org/http://dx.doi.org/10.1016/j.ememar.2016.03.001
   Google Scholar
• Nguyen, M., Skully, M., & Perera, S. (2012). Market power, revenue diversification and bank stability: Evidence from selected South Asian countries. Journal of International Financial Markets, Institutions and Money, 22(4), 897–912. https://doi.org/http://dx.doi.org/10.1016/j.intfin.2012.05.008
   Google Scholar
• Nicoló, G. D., Bartholomew, P., Zaman, J., & Zephirin, M. (2004). Bank consolidation, internationalization, and conglomeration: Trends and implications for financial risk. Financial Markets, Institutions & Instruments, 13(4), 173–217. https://doi.org/https://doi.org/10.1111/j.0963-8008.2004.00076.x
   Google Scholar
• Pennathur, A. K., Subrahmanyam, V., & Vishwasrao, S. (2012). Income diversification and risk: Does ownership matter? An empirical examination of Indian banks. Journal of Banking & Finance, 36(8), 2203–2215. https://doi.org/https://doi.org/10.1016/j.jbankfin.2012.03.021
   Google Scholar
• Rajan, R., Servaes, H., & Zingales, L. (2000). The cost of diversity: The diversification discount and inefficient investment. The Journal of Finance, 55(1), 35–80. https://doi.org/https://doi.org/10.1111/0022-1082.00200
   Google Scholar
• Rossi, S. P., Schwaiger, M. S., & Winkler, G. (2009). How loan portfolio diversification affects risk, efficiency and capitalization: A managerial behavior model for Austrian banks. Journal of Banking & Finance, 33(12), 2218–2226. https://doi.org/https://doi.org/10.1016/j.jbankfin.2009.05.022
   Google Scholar
• Salas, V., & Saurina, J. (2003). Deregulation, market power and risk behaviour in Spanish banks. European Economic Review, 47(6), 1061–1075. https://doi.org/https://doi.org/10.1016/S0014-2921(02)00230-1
   Google Scholar
• Sanya, S., & Wolfe, S. (2011). Can banks in emerging economies benefit from revenue diversification? Journal of Financial Services Research, 40(1), 79–101. https://doi.org/https://doi.org/10.1007/s10693-010-0098-z
   Google Scholar
• Shim, J. (2013). Bank capital buffer and portfolio risk: The influence of business cycle and revenue diversification. Journal of Banking & Finance, 37(3), 761–772. https://doi.org/https://doi.org/10.1016/j.jbankfin.2012.10.002
   Google Scholar
• Simar, L., & Wilson, P. W. (1998). Sensitivity analysis of efficiency scores: How to bootstrap in nonparametric frontier models. Management Science, 44(1), 49–61. https://doi.org/https://doi.org/10.1287/mnsc.44.1.49
   Google Scholar
• Simar, L., & Wilson, P. W. (2000). A general methodology for bootstrapping in non-parametric frontier models. Journal of Applied Statistics, 27(6), 779–802. https://doi.org/https://doi.org/10.1080/02664760050081951
   Google Scholar
• Stein, J. C. (2002). Information production and capital allocation: Decentralized versus hierarchical firms. The Journal of Finance, 57(5), 1891–1921. https://doi.org/https://doi.org/10.1111/0022-1082.00483
   Google Scholar
• Stewart, C., Matousek, R., & Nguyen, T. N. (2016). Efficiency in the Vietnamese banking system: A DEA double bootstrap approach. Research in International Business and Finance, 36, 96–111. https://doi.org/https://doi.org/10.1016/j.ribaf.2015.09.006
   Google Scholar
• Stiroh, K. J. (2004). Diversification in banking: Is noninterest income the answer? Journal of Money, Credit, and Banking, 36(5), 853–882. https://doi.org/https://doi.org/10.1353/mcb.2004.0076
   Google Scholar
• Stiroh, K. J. (2005). Bank risk and revenue diversification: An assessment of using equity returns. Basel: Working Paper, Bank for International Settlements.
   Google Scholar
• Stiroh, K. J., & Rumble, A. (2006). The dark side of diversification: The case of US financial holding companies. Journal of Banking & Finance, 30(8), 2131–2161. https://doi.org/http://dx.doi.org/10.1016/j.jbankfin.2005.04.030
   Google Scholar
• Tacneng, R. (2015). The impact of minority foreign ownership and controlling shareholder on bank risk and performance: Evidence from an emerging economy. Managerial Finance, 41(5), 526–546. https://doi.org/https://doi.org/10.1108/MF-06-2013-0137
   Google Scholar
• Tsai, Y.-S., Lin, -C.-C., & Chen, H.-Y. (2015). Optimal diversification, bank value maximization and default probability. Applied Economics, 47(24), 2488–2499. https://doi.org/https://doi.org/10.1080/00036846.2015.1008766
   Google Scholar
• Van Oordt, M. R. (2014). Securitization and the dark side of diversification. Journal of Financial Intermediation, 23(2), 214–231. https://doi.org/https://doi.org/10.1016/j.jfi.2013.05.001
   Google Scholar
• WB. (2016). World Development Indicators: GDP Growth (annual %). Retrieved from
   Google Scholar
• Williams, B. (2016). The impact of non-interest income on bank risk in Australia. Journal of Banking & Finance, 73, 16–37. https://doi.org/http://dx.doi.org/10.1016/j.jbankfin.2016.07.019
   Google Scholar
• Williams, J. (2004). Determining management behaviour in European banking. Journal of Banking & Finance, 28(10), 2427–2460. https://doi.org/https://doi.org/10.1016/j.jbankfin.2003.09.010
   Google Scholar
• Zhou, K. (2014). The effect of income diversification on bank risk: Evidence from China. Emerging Markets Finance and Trade, 50(Sup3), 201–213. https://doi.org/https://doi.org/10.2753/REE1540-496X5003S312
   Google Scholar