We evaluate the impact of strategic orientation on the failure probability of financial institutions. Using the US credit union industry as the empirical setting, we find that credit unions which exhibit preferential treatment to borrowers are more likely to fail, whereas those who set operational strategies towards balancing the benefits between savers and borrowers experience a lower failure probability. The impacts appear to be more pronounced in small credit unions and in credit unions which have a lower operating experience. We also find that borrower-oriented credit unions generate lower interest margins while neutral behavior credit unions generate higher margins.
Purpose
This paper aims to investigate the decisions of listing for Vietnamese banks and the impact of listing on bank performance.
Design/methodology/approach
A longitudinal data set of 30 commercial banks in the period of 2006–2018 with various univariate and multivariate tests is used.
Findings
This study found that listing is positively associated with bank profitability. The results are consistent even after the control for potential endogeneity problems by propensity score matching methodology and Heckman selection bias models. Further analysis suggests some new alternative channels for the positive impact, namely, the increased quality of information disclosure, technological development and income diversification of commercial banks after listing.
Practical implications
Hence, this paper provides recommendations and policy implications for regulatory bodies regarding the listing of commercial banks in Vietnam.
Originality/value
The contributions to the literature are three-folds. First, this study contributes to a strand of literature on the impact of going public [initial public offering (IPO)/listing] of financial institutions on their performance. While the literature on non-financial firm performance post-going public is ample, few have directly considered the IPO/listing of banks and other financial institutions. Second, in further looking at the impact of listing on bank performance, this study also sheds some light on the new possible channels of the effect and provides evidence of new channels. Then, last but not least, the case of Vietnam could possibly yield interesting results for a transitory stock market. From the evidence, the recommendations and policy implications for a listing of Vietnamese banks are provided.
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