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The Impact of Competition and Industry Concentration on Profitability: Evidence from the Vietnamese Banking Industry

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Proceedings of the 4th International Conference on Research in Management and Technovation (ICRMAT 2023)

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Abstract

Research evaluates the impact of competition through Lerner competitiveness indexes and the concentration of the banking industry on profitability of commercial banks based on the regression of array data of 21 Vietnamese commercial banks in the period of 2013 – 2021. The research results show that the Lerner index is positively correlated with the profitability of the banks. So that, in a fiercely competitive environment, the banks have to spend a lot of money to innovate, to apply modern technology in banking operations, to improve product features, and reduce service prices to compete more effectively. This reduces the profit and profitability of the bank. At the same time, the research results also show that industrial concentration is negatively correlated with the bank’s profitability. Besides, the research results also show that bank size and economic growth rate are positively correlated with the bank’s profitability; while the bad debt ratio, the credit risk provisioning balance, and the leverage ratio are negatively correlated with the bank's profitability.

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Author information

Authors and Affiliations

  1. Hanoi University of Industry, No.298, Cau Dien Street, Bac Tu Liem District, Hanoi, Vietnam

    Tran Thi Lan Anh, Mai Thi Dieu Hang & Nguyen Thi Hong Nhung

Authors
  1. Tran Thi Lan Anh
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  2. Mai Thi Dieu Hang
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  3. Nguyen Thi Hong Nhung
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Corresponding author

Correspondence to Tran Thi Lan Anh .

Editor information

Editors and Affiliations

  1. Centre for Post-Graduate Studies, Hanoi University of Industry, Hanoi, Vietnam

    Thi Hong Nga Nguyen

  2. Gillings School of Global Public Health, University of North Carolina at Chapel, Chapel HIll, NC, USA

    Darrell Norman Burrell

  3. Department of Computer Science and Engineering, CMR Institute of Technology, Hyderabad, Telangana, India

    Vijender Kumar Solanki

  4. Accounting and Auditing Faculty, Academy of Finance, Hanoi, Vietnam

    Ngoc Anh Mai

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© 2024 The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd.

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Anh, T.T.L., Hang, M.T.D., Nhung, N.T.H. (2024). The Impact of Competition and Industry Concentration on Profitability: Evidence from the Vietnamese Banking Industry. In: Nguyen, T.H.N., Burrell, D.N., Solanki, V.K., Mai, N.A. (eds) Proceedings of the 4th International Conference on Research in Management and Technovation. ICRMAT 2023. Springer, Singapore. https://doi.org/10.1007/978-981-99-8472-5_28

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