An Empirical Analysis of Macroeconomic and Bank-Specific Factors Affecting Bank Deposits in Vietnam

Abstract

This paper investigates the macroeconomic and bank-specific factors that determine bank deposits in Vietnam. To explore the association, A Fixed and random effect model was performed on a data set of 40 banks from 2006 to 2019. Studied bank-specific factors include capital adequacy ratio, profitability, bad loan, liquidity and listing. In addition, GDP and inflation are the macroeconomic factors considered. Based on panel data analysis, it is suggested that bank-specific factors such as bank size, bad loan, profitability GDP and inflation have a notable effect on bank depositsAmong these factors, profitability and GDP showed a positive effect on bank depositsIn contrast, Bank size, bad loan and inflation showed an insignificant effect on bank deposits. The study also highlights some new factors to provide a better understanding of bank deposits in emerging economies like Vietnam.