The impact of foreign ownership and foreign management to income from service activities of Vietnamese commercial banks

Abstract

Since the globalization of the financial market, foreign individuals and organizations participating in the ownership and management of Vietnamese commercial banks have become increasingly common. Foreign ownership and management are expected to align domestic banks with the international standards. This study analyzes the impact of foreign ownership and management on income from service activities of Vietnamese commercial banks using regression models (OLS, FEM, REM, FGLS) based on financial data from 18 of the largest commercial banks during the period 2013- 2022. The results indicate that the proportion of shares owned by foreign individuals and organizations has a negative impact, while the proportion of foreign executives on the management board has a positive impact on banks' income from service activities. These findings further affirm the relationship between owners and managers to the banks’performance and offer some recommendations for increasing income from service activities to meet the strategic targets of commercial banks.