Research
PUBLICATION
PUBLICATION
Peer-reviewed journals:
Peer-reviewed journals:
Phung, G., & Tröge, M. (2024). Making depositors greedy and careless: Government safety nets and the degradation of depositor discipline (published online, January 2024).
Phung, G., & Tröge, M. (2024). Making depositors greedy and careless: Government safety nets and the degradation of depositor discipline (published online, January 2024).
Depositors react substantively less to risk after bailing out measures taken by the government, threatening the role of market discipline.
Depositors react substantively less to risk after bailing out measures taken by the government, threatening the role of market discipline.
Abstract:
Abstract:
In emerging countries, deposits play an important role in banks' total funding; hence, depositor discipline may significantly impact banking performance and financial system stability. This paper investigates depositor discipline before and after Vietnam's 2008–2011 banking crisis when depositors had little experience regarding bank bailouts and the amount of deposit insurance was limited to a low cap. The study points out that before the crisis, the level of deposit financing in banks depended on both the interest rates offered and on measures of banks' risk-taking. After the crisis, given that the Vietnamese government prevented all bank failures to ensure economic, political, and social stability, depositors still react to interest rate changes, but substantially less to risk. This suggests that they have learned that their deposits are safe regardless of the risk the bank is taking.
In emerging countries, deposits play an important role in banks' total funding; hence, depositor discipline may significantly impact banking performance and financial system stability. This paper investigates depositor discipline before and after Vietnam's 2008–2011 banking crisis when depositors had little experience regarding bank bailouts and the amount of deposit insurance was limited to a low cap. The study points out that before the crisis, the level of deposit financing in banks depended on both the interest rates offered and on measures of banks' risk-taking. After the crisis, given that the Vietnamese government prevented all bank failures to ensure economic, political, and social stability, depositors still react to interest rate changes, but substantially less to risk. This suggests that they have learned that their deposits are safe regardless of the risk the bank is taking.
Phung, G., Trinh, H.H., Nguyen, T., & Trinh, V.Q. (2023). Top-management Compensation and Environmental Innovation Strategy. Business Strategy and the Environment (open access), Volume 32, May 2023 - Issue 4, p. 1634-1649.
Phung, G., Trinh, H.H., Nguyen, T., & Trinh, V.Q. (2023). Top-management Compensation and Environmental Innovation Strategy. Business Strategy and the Environment (open access), Volume 32, May 2023 - Issue 4, p. 1634-1649.
Top-management compensation is positively linked with higher scores of eco-innovation. This relationship is less intensified in the more polluting industries, but more pronounced in the more innovative ones.
Top-management compensation is positively linked with higher scores of eco-innovation. This relationship is less intensified in the more polluting industries, but more pronounced in the more innovative ones.
Abstract:
Abstract:
The increasing awareness of global climate change puts more pressure on firms to reduce their environmental externalities. Managers long ignored this responsibility as it may erode business profits, going against their traditional goals. In this study, we examine the effect of extrinsic incentives (i.e., reward-driven motivation) for top management on corporate environmental innovation strategy (i.e., eco-innovation), using a large dataset of S&P1500 non-financial firms for 2000–2020. The results indicate that firms with greater levels of top-management compensation exhibit higher scores of eco-innovation engagement. The effect holds after we address the endogeneity problem through the quasi-natural experiment using the difference-in-differences analysis on the event of the Paris Agreement 2015. Our further investigations reveal that such a positive impact of managerial incentives on eco-innovation is less intensified in the more polluting industries but more pronounced in more innovative ones.
The increasing awareness of global climate change puts more pressure on firms to reduce their environmental externalities. Managers long ignored this responsibility as it may erode business profits, going against their traditional goals. In this study, we examine the effect of extrinsic incentives (i.e., reward-driven motivation) for top management on corporate environmental innovation strategy (i.e., eco-innovation), using a large dataset of S&P1500 non-financial firms for 2000–2020. The results indicate that firms with greater levels of top-management compensation exhibit higher scores of eco-innovation engagement. The effect holds after we address the endogeneity problem through the quasi-natural experiment using the difference-in-differences analysis on the event of the Paris Agreement 2015. Our further investigations reveal that such a positive impact of managerial incentives on eco-innovation is less intensified in the more polluting industries but more pronounced in more innovative ones.
Phung, G., & Tröge, M. (2022). Difficult to Digest: Takeovers of Distressed Banks in Vietnam. Economics of Transition and Institutional Change, Volume 30, 2022 - Issue 3.
Phung, G., & Tröge, M. (2022). Difficult to Digest: Takeovers of Distressed Banks in Vietnam. Economics of Transition and Institutional Change, Volume 30, 2022 - Issue 3.
The takeovers of distressed banks have long-term detrimental effects on acquirers, even after controlling for mechanical effects.
The takeovers of distressed banks have long-term detrimental effects on acquirers, even after controlling for mechanical effects.
Abstract:
Abstract:
Government-induced or voluntary takeovers are frequently used as an indirect way to bail out distressed banks. In this paper, we analyse the impact of acquisitions on banking performance in Vietnam. To demonstrate that the acquirer is not simply inheriting the properties of the underperforming targets, we compare the performance of the merged bank to the pro forma consolidated performance of the acquirer and the target before the merger. We show that takeovers during and after the financial crisis substantially weaken profitability and liquidity and that this negative effect persists for a period of at least 6 years. These findings show that shareholders should be wary of acquisitions and suggest that stabilizing banks through mergers may have detrimental indirect long-term consequences on the efficiency of financial systems and ultimately economic growth.
Government-induced or voluntary takeovers are frequently used as an indirect way to bail out distressed banks. In this paper, we analyse the impact of acquisitions on banking performance in Vietnam. To demonstrate that the acquirer is not simply inheriting the properties of the underperforming targets, we compare the performance of the merged bank to the pro forma consolidated performance of the acquirer and the target before the merger. We show that takeovers during and after the financial crisis substantially weaken profitability and liquidity and that this negative effect persists for a period of at least 6 years. These findings show that shareholders should be wary of acquisitions and suggest that stabilizing banks through mergers may have detrimental indirect long-term consequences on the efficiency of financial systems and ultimately economic growth.
Phung, G., & Tröge, M. (2018). Can Foreigners Improve the Profitability of Emerging Market Banks? Evidence from the Vietnamese Strategic Partner Program. Emerging Markets Finance and Trade, Volume 54, 2018 - Issue 7.
Phung, G., & Tröge, M. (2018). Can Foreigners Improve the Profitability of Emerging Market Banks? Evidence from the Vietnamese Strategic Partner Program. Emerging Markets Finance and Trade, Volume 54, 2018 - Issue 7.
Foreign bankers improve performance only if they are hired by the bank's majority owner, but not if they are sent by the strategic partner.
Foreign bankers improve performance only if they are hired by the bank's majority owner, but not if they are sent by the strategic partner.
Abstract:
Abstract:
Foreign ownership and foreign management are often assumed to improve the efficiency of emerging market banks. Our article examines this relationship for the Vietnamese strategic partner program, where foreign banks have been allowed to take minority stakes in local banks. We add to the existing literature by distinguishing between ownership by foreign strategic and non-strategic investors, and between foreign management sent by the strategic partner and independent foreign executives. We show that only the presence of independent foreign executives has a positive impact on banks. We interpret these results as the consequence of conflicts of interest and power struggles between local shareholders and the strategic partner, which prevents efficiency in enhancing technology transfer.
Foreign ownership and foreign management are often assumed to improve the efficiency of emerging market banks. Our article examines this relationship for the Vietnamese strategic partner program, where foreign banks have been allowed to take minority stakes in local banks. We add to the existing literature by distinguishing between ownership by foreign strategic and non-strategic investors, and between foreign management sent by the strategic partner and independent foreign executives. We show that only the presence of independent foreign executives has a positive impact on banks. We interpret these results as the consequence of conflicts of interest and power struggles between local shareholders and the strategic partner, which prevents efficiency in enhancing technology transfer.
Book chapter:
Book chapter:
Phung, G., & Tröge, M. (2015). Improving Efficiency of Emerging Market Banks: A Matter of Ownership, Control, or Getting One’s Hands Dirty?. In Managing in Recovering Markets (pp. 327-342). Springer, New Delhi.
Phung, G., & Tröge, M. (2015). Improving Efficiency of Emerging Market Banks: A Matter of Ownership, Control, or Getting One’s Hands Dirty?. In Managing in Recovering Markets (pp. 327-342). Springer, New Delhi.
A foreign partner had a positive impact on a bank's performance only if the financial participation was also accompanied by an active implication of foreign bankers.
A foreign partner had a positive impact on a bank's performance only if the financial participation was also accompanied by an active implication of foreign bankers.
Abstract:
Abstract:
Under the Vietnamese strategic partnership program, a range of foreign banks have been allowed to take minority participation in local banks. This paper studies the effect of this program on different measures of bank profitability. We demonstrate that the presence of a foreign partner had a positive impact on performance only if the financial participation was also accompanied by an active implication of foreign bankers. We also observe that whereas foreigners on the supervisory board seem to boost accounting return on equity (ROE), a more operational involvement of foreigners on the executive board improves fundamental characteristics such as the net interest margin (NIM).
Under the Vietnamese strategic partnership program, a range of foreign banks have been allowed to take minority participation in local banks. This paper studies the effect of this program on different measures of bank profitability. We demonstrate that the presence of a foreign partner had a positive impact on performance only if the financial participation was also accompanied by an active implication of foreign bankers. We also observe that whereas foreigners on the supervisory board seem to boost accounting return on equity (ROE), a more operational involvement of foreigners on the executive board improves fundamental characteristics such as the net interest margin (NIM).
Phung, G., Truong, H. and Trinh, H.H. (2023), "Determinants in the Development of Financial Centers: Evolution Around the World", Kim, S.-J. (Ed.) Fintech, Pandemic, and the Financial System: Challenges and Opportunities (International Finance Review, Vol. 22), Emerald Publishing Limited, Bingley, pp. 337-362.
Phung, G., Truong, H. and Trinh, H.H. (2023), "Determinants in the Development of Financial Centers: Evolution Around the World", Kim, S.-J. (Ed.) Fintech, Pandemic, and the Financial System: Challenges and Opportunities (International Finance Review, Vol. 22), Emerald Publishing Limited, Bingley, pp. 337-362.
Critical determinants in the formation of international financial centers include (i) economic growth; (ii) governance and business environment; (iii) financial development; (iv) labor force; (v) infrastructure accessibility; and (vi) the country’s reputation and stability. The recent political and technological developments in the world also impact the future of different financial centers worldwide.
Critical determinants in the formation of international financial centers include (i) economic growth; (ii) governance and business environment; (iii) financial development; (iv) labor force; (v) infrastructure accessibility; and (vi) the country’s reputation and stability. The recent political and technological developments in the world also impact the future of different financial centers worldwide.
Abstract:
Abstract:
The development of financial markets as well as a country’s overall financial system plays a crucial role in the evolution of the world’s real economy. In developed countries like the USA, UK, Japan, and European nations, the world’s financial centers are located for exchanging huge capital flows with well-established functioning. However, laying the foundation for a financial center can be a big challenge to developing markets whose financial systems are still in the early stages, since the formation of financial centers is determined by multiple factors. Motivated by that reason, this book chapter provides a comprehensive review of critical determinants in the formation of international financial centers, including (i) economic growth; (ii) governance and business environment; (iii) financial development; (iv) labor force; (v) infrastructure accessibility; and (vi) the country’s reputation and stability. In line with the reviewed literature, the study particularly highlights the recent political and technological developments in the world and their impacts on the future of different financial centers worldwide.
The development of financial markets as well as a country’s overall financial system plays a crucial role in the evolution of the world’s real economy. In developed countries like the USA, UK, Japan, and European nations, the world’s financial centers are located for exchanging huge capital flows with well-established functioning. However, laying the foundation for a financial center can be a big challenge to developing markets whose financial systems are still in the early stages, since the formation of financial centers is determined by multiple factors. Motivated by that reason, this book chapter provides a comprehensive review of critical determinants in the formation of international financial centers, including (i) economic growth; (ii) governance and business environment; (iii) financial development; (iv) labor force; (v) infrastructure accessibility; and (vi) the country’s reputation and stability. In line with the reviewed literature, the study particularly highlights the recent political and technological developments in the world and their impacts on the future of different financial centers worldwide.
WORKING PAPERS
WORKING PAPERS
Trinh, V.Q., Trinh, H.H., Nguyen, T., & Phung, G. (2023). Can Firms Adopting a Green Innovation Policy Fetch Better Deals From Debtholders? A Study on G7 Countries
Trinh, V.Q., Trinh, H.H., Nguyen, T., & Phung, G. (2023). Can Firms Adopting a Green Innovation Policy Fetch Better Deals From Debtholders? A Study on G7 Countries
Companies with a strong green innovation policy are able to secure better deals from debtholders, as their lower carbon intensity and reduced bankruptcy risk lower the cost of debt. This is especially true for financially constrained businesses.
Companies with a strong green innovation policy are able to secure better deals from debtholders, as their lower carbon intensity and reduced bankruptcy risk lower the cost of debt. This is especially true for financially constrained businesses.