The Impact of Competition on Banking Stability of Vietnamese Commercial Banks

Abstract

This article analyzes the impact of competition on the banking stability of Vietnamese commercial banks. Based on data collected from 28 commercial banks in Vietnam during the period 2011–2023, the article uses the Lerner index to measure the competition, the Zscore index to measure the banking stability, and other factors to measure the impact of competition on banking stability by using the OLS, FEM, REM, and GLS methods. Research results show a positive correlation between competition and the banking stability of Vietnamese commercial banks. While factors such as equity to total assets ratio (CAP), credit growth rate (GRW), ownership form (GOV), GDP growth (GDP), and inflation (INF) have positive impacts on banking stability, the total asset scale (SIZE) has negative impacts on banking stability.