ICT as a Key Determinant of Efficiency: A Bootstrap-Censored Quantile Regression (BCQR) Analysis for Vietnamese Banks
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Date
2022-06-16
Open Access Location
Journal Title
Journal ISSN
Volume Title
Publisher
MDPI (Basel, Switzerland)
Rights
(c) 2022 The Author/s
CC BY 4.0
CC BY 4.0
Abstract
There is evidence that ICT developments can improve bank efficiency and performance. Previous studies often employ data envelopment analysis (DEA) to first examine bank performance and then use a second-stage regression to explain the influences of other environmental factors, including ICT, on such efficiency. Since DEA efficiency scores are bounded between the (0, 1] intervals, Tobit and truncated regressions are commonly used in this stage. However, none has accounted for the skewness characteristic of DEA efficiency. This paper applied a bootstrap-censored quantile regression (BCQR) approach to triply account for the issues of a small sample (via bootstrap), bounded intervals (via censored regression), and skewness (via quantile regression) in DEA analysis. We empirically examined the efficiency and performance of 27 Vietnamese commercial banks in the 2007–2019 period. The efficiency scores derived from our first stage revealed that they are skewed and thus, justify the use of the BCQR in the second stage. The BCQR results further confirmed that ICT developments could enhance bank efficiency, which supports the recent policy to restructure the Vietnamese banking sector toward innovation and digitalization. We also examined the impacts of other factors such as bank ownership, credit risk, and bank size on efficiency.
Description
Keywords
information and communication technology (ICT), data envelopment analysis (DEA), bootstrap-censored quantile regression (BCQR), banking efficiency, Vietnam
Citation
Le TDQ, Ngo T, Ho TH, Nguyen DT. (2022). ICT as a Key Determinant of Efficiency: A Bootstrap-Censored Quantile Regression (BCQR) Analysis for Vietnamese Banks. International Journal of Financial Studies. 10. 2.