Using the Rosse-Panzar H-statistic to investigate the the competitive condition in Vietnamese banking system

Abstract

The Vietnamese banking market has undergone many changes over the last decade. The Panzar-Rosse (1987) methodology-also called H statistic is applied to investigate the level of competition in Vietnamese banking sector over the period 2005-2015 by using the data collected from the sample of 20 commercial private banks and 1 state-owned bank (Agribank). The results of this study reveal that Vietnamese banking market operates under the monopolistic condition (H takes the value at 0.4459, between 0 and 1). However, the results of competitive test for each year show that banks appear to be in monopoly condition from 2005 to 2009, and banks appear to be in monopolistic condition from 2010 to 2015, except the year 2012 (the banking market is not in equilibrilium condition, so that I can not apply H statistic for this year).