Abstract

This paper investigates loan loss provisioning (LLP) behaviour by Vietnamese banks during the period 2006–2012. We test the capital, income-smoothing and cyclical management hypotheses and examine whether the inclusion of X-efficiencies and/or risk control variables influences provisioning behaviour. When the X-efficiency estimates are incorporated into the models, Vietnamese banks do not exhibit counter-cyclical or capital management manipulation by managers, but counter cyclical income smoothing. Yet, the inclusion of risk control variables in X-efficiency scores (either equity or reserves for impaired loans) supports the addition of capital management hypotheses.

Publication Type:	Article
Additional Information:	© 2015, Elsevier. This manuscript version is made available under the CC-BY-NC-ND 4.0 license http://creativecommons.org/licenses/by-nc-nd/4.0/
Publisher Keywords:	Loan loss provisioning, Capital management hypothesis, Income smoothing, Vietnam, X-efficiency
Subjects:	H Social Sciences > HG Finance
Departments:	Bayes Business School > Actuarial Science & Insurance

Preview

Text - Accepted Version Available under License Creative Commons Attribution Non-commercial No Derivatives. Download (436kB) | Preview

Export

Downloads