Tu D. Q. Le

1. Worldwide authorities and scholars have paid greater attention to the UN’s Sustainable Development Goals and global initiatives in corporate social responsibility (CSR) (Ngo et al., 2023). The n...

This study examines the impact of shadow banking on bank stability using a sample of 41 countries from 2004 to 2021. The findings show that shadow banking is negatively associated with bank stability. However, a U-shaped relationship between shadow banking and bank stability implies that shadow banking is positively related to bank stability in the long term. The results also emphasize that institutional quality and bank capital regulation, individually, may hardly affect the relationship between shadow banking and bank stability. Furthermore, this study found that institutional quality and Basel capital regulation may jointly reduce the negative effect of shadow banking on bank stability. Therefore, these policies should be considered simultaneously in light of the rapid growth of shadow banking. Empirical findings are robust across different regression techniques and settings.

Jong-Hwa Lee, Van-Ho Nguyen, Quang-Thang Tran, Duc-Quang-Tu Le, The-Dai-Nghia Nguyen, and Hoanh-Su Le, Member, KIICE. Journal of information and communication convergence engineering 2025;23:327-35. https://doi.org/10.56977/jicce.2025.23.4.327

This research is the first attempt to examine the joint effect of digitalization and bank–fintech partnerships on bank profitability in Vietnam between 2010 and 2019. This study also examines whether this impact may vary across different categories of bank ownership and size. The findings indicate a negative impact of digitalization on bank profitability. However, a U-shaped relationship between digitalization and bank profitability implies that the benefits of digitalization can be realized up to a certain threshold. Additionally, the positive joint effect of digitalization and bank–fintech partnerships on bank profitability suggests that bank–fintech partnerships may mitigate the negative impact of digitalization on bank profitability. Furthermore, larger, listed, and foreign-owned banks may benefit the most from pursuing both strategies.

This study empirically assesses the impact of digitalisation on bank efficiency in Vietnam using the two-stage framework for an unabalanced sample of 27 banks from 2010 to 2019. In the first stage, we use the conventional data envelopment analysis (DEA) to estimate bank efficiency scores. Then, these efficiency scores are regressed on environmental variables to determine factors affecting bank efficiency. The findings show a negative relationship between digitalisation and bank efficiency. However, the results indicate a U-shaped relationship between digitalisation and bank efficiency, being first impeded and then facilitated. Foreign-owned and state-owned banks are more efficient than their domestic and privately owned peers. Our results, however, show that the impact of digitalisation on bank efficiency does not vary among bank ownership and listing status. Furthermore, bank efficiency is negatively affected by bank size. The results further demonstrate that large banks with higher levels of digitalisation may not be beneficial, at least in the short run. Nonetheless, our study provides additional evidence to the extant literature on the association between digitalisation and bank efficiency. Our empirical evidence also offers motivations for banks to pursue ongoing digitalisation strategies when the banking system environment is more intensively competitive.

This study investigates the impact of diversification on the relationship between the COVID-19 pandemic and bank performance using a sample of 121 banking systems from 2016Q1 to 2021Q2. Using the system generalised method of moments, the findings show the negative impact of COVID-19 on the global banking system. This is consistent with the literature. Furthermore, the findings emphasise that diversification (e.g., lending diversification, income diversification, and geographic lending diversification) may mitigate the adverse effect of COVID-19 on banking performance. Therefore, a diversification strategy should be further considered to overcome future shocks.

This study empirically examines the determinants of merger and acquisition (M&A) activities in Vietnam from 2005 to 2020, which has not been examined before, using a fixed-effects model for a sample of 674 completed M&A deals. The results indicate that targets’ corporate governance and deal characteristics have mixed effects on M&A decisions. More specifically, the independent member of the board and CEO duality of the target is negatively associated with most M&A types, except for cross-border mergers. However, the impact of targets’ blockholders is consistently positive regardless of M&A types. When observing the deal characteristics, mixed evidence is also found in the case of M&A payment form, industry-relatedness between the bidder and the target, the bidder’s stake in the target, and foreign ownership in the bidder’s stake. More interesting, our study emphasizes that voluntary agreement is seemingly critical to M&A decisions regardless of different types. Our results suggest several important implications, including balancing independent directors on the board, accounting for CEOs’ and other blockholders’ interests and influence, considering the types of M&A payments, and involving foreign investors in M&A activities. By understanding these implications, firms can better navigate the complexities of M&A transactions, enhancing their decision-making processes and ultimately contributing to improved shareholder value.

The EU faces two economic challenges: managing non-performing exposures (NPEs) and climate change. This paper analyzes the relationship between the NPEs of domestic banking groups and climate risks, including macroeconomic variables such as the GDP growth rate, unemployment rate (UnEmp), and the voice and accountability percentile (VCA) and the interaction variable between the GHG and the Rule of Law Percentile (GhGRLP). The estimation uses ordinary least squares with time-fixed and individual effects. Physical and transition risks significantly affect NPEs, showing that both adverse climate events and the transition to a low-carbon economy worsen the financial situation of European banking institutions. The analysis also revealed that increased levels of VCA lead to a rise in NPEs, while an increase in GhGRLP reduces NPEs. In contrast, financial institutions tend to recognize and report NPEs more accurately in contexts with greater transparency and accountability. In comparison, UnEmp negatively affects NPEs, suggesting that economic support measures during high unemployment can reduce NPEs in the subsequent period. In conclusion, climate risk management represents a crucial challenge for the financial stability of banking institutions. Policymakers and financial institutions must continue to develop and implement climate change mitigation and adaptation strategies to preserve financial system stability amid growing climate uncertainties.

1. It is widely recognized that a robust financial system is essential for the advancement and growth of economies. A key factor influencing global shifts was the aim to boost the banking sector’s ...