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Open AccessArticle

Capital Structure and Bank Profitability in Vietnam: A Quantile Regression Approach

by Tu D. Q. Le 1,2,* and Dat T. Nguyen 3
1
Institute for Development and Research in Banking Technology, University of Economics and Law, Ho Chi Minh City 700000, Vietnam
2
Vietnam National University, Ho Chi Minh City 700000, Vietnam
3
Faculty of Economics, Bac Lieu University, Bac Lieu 960000, Vietnam
*
Author to whom correspondence should be addressed.
J. Risk Financial Manag. 2020, 13(8), 168; https://doi.org/10.3390/jrfm13080168
Received: 12 June 2020 / Revised: 16 July 2020 / Accepted: 27 July 2020 / Published: 1 August 2020
(This article belongs to the Section Banking and Finance)
We empirically investigate the impact of capital structure on bank profitability using a quantile regression method in the Vietnamese banking system during 2007–2019. Our results suggest that the nonlinear relationship between capitalization and bank profitability is only significant at the 90th quantile. This is the first study to conclude that the turning point of capital ratio increases throughout the profitability distribution. Our findings thus suggest that a continuous increase in bank capital requirements does not necessarily result in higher bank profitability.
Keywords: capital structure; bank profitability; Vietnam; quantile regression; nonlinearity capital structure; bank profitability; Vietnam; quantile regression; nonlinearity
MDPI and ACS Style

Le, T.D.Q.; Nguyen, D.T. Capital Structure and Bank Profitability in Vietnam: A Quantile Regression Approach. J. Risk Financial Manag. 2020, 13, 168.

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