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Abstract
Over the last two decades in Vietnam, the financial system in general and the banking system in particular have been transformed from a monopoly into a diversified system allowing all market players to compete fairly and effectively. During these years, the Vietnamese banking system did gradually develop in terms of size of the banking sector in the economy, number of banking institutions, amount of credits for the economy, and amount of other banking services. However, we still find a lack of research on the efficiency of the banking sector in Vietnam over the time. This study, with a focus on evaluating the efficiency of Vietnamese commercial banks during the period of four years from 2007 to 2010 using Data Envelopment Analysis (DEA).Through this paper, we hope that the main findings can assist bank managers and governors in understanding their bank's efficiency as well as the reasons of their inefficiency. Additionally, it is hoped that some suggestions can be given in order to improve the efficiency of the Vietnamese commercial banks.
Keywords: Vietnamese Commercial Banks, Efficiency & DEA
JEL Classification: G10, M19
(ProQuest: ... denotes formulae omitted.)
1. Introduction
Evaluating the efficiency of banking in general and of commercial banking performance in particular, has become a common practice not only in education and training institutions but also in the business circle worldwide. Chuang and Tang (2014) measured efficiency using the stochastic approach based on the translog cost function. As in other countries in the world, the banking industry in Vietnam has been playing a significant role to the overall economic development of the country, especially after Vietnam's joining the World Trade Organization (WTO) in 2007. In fact, the event of Vietnam's becoming the 150th official member of WTO has created both challenges and opportunities for the country in the cause of its increasingly strong and profound integration into the global market. Specifically, the above-named event has been transforming the country's economy from a centrally-subsidized bureaucratic to a more and more market oriented one. Of course, the period of nearly five years is too short to make any significant changes to a long-standing under-developed economy like that in Vietnam. Yet, there has already been a sign of a prospect that Vietnam will soon become...