Sự ảnh hưởng của phát triển ngành ngân hàng đến tăng trưởng kinh tế: Nghiên cứu từ nền kinh tế Việt Nam

Nội dung text: Sự ảnh hưởng của phát triển ngành ngân hàng đến tăng trưởng kinh tế: Nghiên cứu từ nền kinh tế Việt Nam

1. INTERNATIONAL CONFERENCE FOR YOUNG RESEARCHERS IN ECONOMICS & BUSINESS 2019 ICYREB 2019 THE INFLUENCE OF BANKING SECTOR DEVELOPMENT ON ECONOMIC GROWTH: ANALYSIS FROM VIETNAMESE ECONOMY SỰ ẢNH HƯỞNG CỦA PHÁT TRIỂN NGÀNH NGÂN HÀNG ĐẾN TĂNG TRƯỞNG KINH TẾ: NGHIÊN CỨU TỪ NỀN KINH TẾ VIỆT NAM Ngo Duc Tien, Phung Thu Ha Academy of Finance phungthuha91@gmail.com ABSTRACT The aim of this study is to clarify the controversial relationship between banking sector developmentand economic growth for Vietnam. Thus, this paper will test the relationship between banking sector development and economic growth by using quarterly data of some banking sector indexes (credit facilities, depositor fund, banking capital and interest rate) and gross domestic product during period 2009 - 2017.The factual model was conducted by using ordinary least square regression to show that gross domestic product is obviously impacted by the banking sector development. The result shows that banking credits are positively related to economic growth. This leads to the fact that banking industry development can contribute to improve productive capacity of Vietnamese economy as case of supply leading. Finally, the result of this paper points out some crucial lesson to the Vietnamese authority policymakers: there is strong real benefit from Banking credits policy owing to the important effect on Vietnamese economy. Keywords: Interest rate, banking industry development, banking credits, gross domestic product. TÓM TẮT Mục tiêu của bài nghiên cứu là làm rõ mối quan hệ giữa sự phát triển của ngành ngân hàng và tăng trưởng kinh tế ở Việt Nam. Do đó, bài viết này sẽ kiểm tra sự ảnh hưởng của phát triển ngành ngân hàng và tăng trưởng kinh tế bằng việc sử dụng dữ liệu theo tháng liên quan đến các chỉ tiêu gồm: tổng dư nợ tín dụng, tổng huy động vốn từ nền kinh tế, vốn tự có của ngân hàng, lãi suất tái cấp vốn và tổng sản phẩm quốc nội (GDP) trong giai đoạn 2009 - 2017. Mô hình thực tế được thực hiện bằng cách sử dụng hồi quy bình phương tối thiểu thông thường chỉ ra rằng giá trị tổng sản phẩm quốc nội rõ ràng bị ảnh hưởng bởi sự phát triển của ngành ngân hàng. Kết quả cho thấy tín dụng ngân hàng có liên quan tích cực đến tăng trưởng kinh tế. Điều này cho thấy rằng sự phát triển ngành ngân hàng có thể góp phần nâng cao năng lực sản xuất của nền kinh tế Việt Nam. Vì vậy, kết quả của bài viết này chỉ ra một số bài học quan trọng cho các nhà hoạch định chính sách của Việt Nam: xây dựng chính sách tín dụng đúng đắn góp phần làm tăng trưởng kinh tế của Việt Nam. Từ khóa: Lãi suất, sự phát triển ngành ngân hàng, tín dụng ngân hàng, tổng sản phẩm quốc nội. 1. Introduction In the development strategies of each country, economic growth is always the most important priority. Especially in developing countries that are dealing with many economic problems such as unemployment, poverty, lowing living standards, inflation and etc. These countries highly demand stimulating and managing economic growth to increase their national income and to create more job opportunities in order to improve their living standards. Economic historians, such as Patrick (1966) and Richard (2003), notices that the economics developing sophisticated financial systems at early stage are the most successful. Therefore, economic growth theory believes that financial institutions speciallybank is considered a useful instrument for improving the productive capacity of the economyand its important internal source of fund for any country especially in the birth stages ofeconomic growth (Schumpeter, 1911). Certainly, banking system is important to the economic growth due to its ability in creating financial funds for society by attracting deposits from savers. Secondly, its role in allocating the funds to encourage investment and production through providing loans. Thirdly, banking system can help to create economic expansion to the most economic sectors like agriculture, industry and trading. Finally, banking system playsassociate role between savers and borrowers. 91
2. INTERNATIONAL CONFERENCE FOR YOUNG RESEARCHERS IN ECONOMICS & BUSINESS 2019 ICYREB 2019 The period 2009 - 2017 can be considered as an illustration of Vietnamese economy. Vietnamese economy suffered the impact from international economic crisis. In 2009, the rate of GDP development of Vietnam only stumbled to 5.32%, the lowest amount during a decade. From 2010 to 2017, Vietnamese economy has recovered gradually and the rate of GDP development reached a peak of 6.81%, the highest number after 10 years. To obtain this achievement, Vietnamese government conducted many financial policies which not only helped to gain the economic growth but also control inflation. These policies mainly concentrated on control the operation of banking sector. In fact, in Vietnamese financial sector, banks account for the most numbers of assets, for example credit institutes owned 96.2% of assets of financial system in 2016 [22]. Therefore, banking sector has the significant influence on Vietnamese economy and controlling it effectively will bring positive impacts on economic growth. Originally, banking sector impacting on economic growth has been widely debated. Hicks (1969) asserted that economic growth and development is boosted by financial system and it is called supply leading. Banking credits provide financial fund to support economic activities and that is the way to cause economic growth. Correspondingly, King and Levine (1993) and Miller (1998) stated that the result of financial development is economic growth. This means that the development of financial system affects the economic growth positively. However, Goldsmith (1969) verified that the root of financial development is economic development. Moreover, the higher the economic growth rate makes demand of credits higher. In Vietnam, the literature review on banking sector still lacks of reasearches on the relationship between banking sector development and economic growth. Thus, this paper empirically tests the relationship between banking sector development and economic growth. Certainly, the goal of it is investigating the impact of banking credits on Vietnamese economic growth. Besides, it tests the impact of credit facilities, banking deposits, interest rate on credits, on gross domestic product (GDP) as proxy of economic growth rate. The structure of the study is organized as follows: section II provides information on the previousliteratures related to banking sector development and economic growth. Section III states theoretical framework and research hypothesis. Section IV provides data sources and researchmethodology. Section V discusses the empirical findings. Finally, Section VI concludes theresults. 2. Literature review The linkage between banking sector development and economic growth is considered as a significant and positive relationship and it has been mentioned in many previous literatures.In the early study, Schumpeter (1911) emphasizes on the important role of financial sector within economic development. Patrick (1966) presents the same viewpoint under the title of a model in financial development and economic growth literature review. The model named Supply-Leading shows that developed financial markets increase economic growth. The impact of financial development on economic growth has been featured in capital structure theories. These theories included bank-based, market-based, financial services-based and law and finance-based theories. Bank-based theory concentrates on positive influence of commercial banks on financial development. It explains that banks can mobilize resources and reduce risk for the economy (Anwar and Cooray, 2012). Market-based theory focuses on benefits, which are created by the good performance of financial markets, to the promotion of successful economic performance (Levine, 2005). Financial services-based theory based on both bank-based and market-based theories highlight the importance of key financial services that is provided by financial system. This theory explains that financial services areinvolved in industrial development and economic growth (Koseet al., 2010), because financial markets and institutes contributeto optimal distribution of risk and yield.Law and finance-basedtheory argues that financial systems are vital factors for firms,industries, and success of national economy (Anwar and Cooray, 2012). 92
3. INTERNATIONAL CONFERENCE FOR YOUNG RESEARCHERS IN ECONOMICS & BUSINESS 2019 ICYREB 2019 McKinnon (1973) confirmed that a rise of banking services and financial activities will contribute to economic growth. Likewise, King and Levine (1993) argued that funding to the economy will stimulates the movement of economic wheels. Nevertheless, basing on the causality test between financial development and growth across 16 developing countries carried out by Demetriades and Hussein (1996), no meaningful relationship between financial development and economic growth was found. Similarly, Miwa et al (2000) researched the role of central banks on improving Japanese economic growth. They explored that Japanese companies did not prefer banking credit. They considered that the manufacturing enterprises in Japan mobilize their financial resources through decentralized competitive capital markets rather than banking fund. However, Calderon and Liu (2003) analyzed the mutual relationship between financial development and economic growth using data collected in 109 countries during the period 1960 - 1994. They revealed on the fact that the influence of economic growth on financial development becomes more obvious over long periods (advanced countries). Thus, they agree with the supply-leading theory. Hshin-Yu and Alan Reichert (2006) emphasized on the causual relationship between financial sector development and economic growth in emerging and developed countries. Granger causality and Odedokun model were used in their research. The result of this research shows that there is a strong supply-leasing relation between banking sector development and economic growth. Moreover, Al-Khatib and Al-Saffar (2013) tested the relationship between financial development and economic growth in Jordan from 2001 to 2012. They found out that there is a strong demand-leading relationship between banking sector development and economic growth. It means that banking sector development is dramatically impacted by the improvement of economic output. Frikha and McMillan (2016) researched the role of Islamic banks in the rise of gross domestic product in 10 developing countries namely Bahrain, Egypt, Jordan, Kuwait, Pakistan, Saudi Arabia, Qatar, Sudan, Turkey and United Arab Emirates. Ordinary least square regression for testing 120 banks from different developing countries was used in their research. They found that conventional banks support economic growth. Moreover, the combination between Islamic and conventional way can help to improve economic growth. However, the practice of Islamic banks is away from their theoretical mode in termsof participation results. Besides, Prochniak and Wasiak (2017) investigated the influence offinancial system on economic growth in 28 EU and 34 OCED economies between 1993 and 2013. They used some banking variables such as domestic credit, nonperforming loan, capital to assets ratio, market capitalization as explanatory variables and gross domestic product as dependent variable. They found that there is a positive significant relationship between banking system and economic growth. Zhao (2017) examined the effect of financial development to economic output by checking data collected from 286 Chinese cities from 2007 to 2014. The study used cross sectional regression model to find the results. The result showed that Chinese growth is not impacted significantly positively by the development of financial system. Nevertheless, some banking variables have negative effect on growth. Besides, Bongini et al (2017) tested the role of financial development in economic growth of Central, Eastern and South Eastern European Countries (CESEE) during the period 1995-2014. They researched whether CESEE economy benefits from the presence of foreign owned banks. The result indicated that those banks boost economic growth and indisputably positive to local market. Thus, this research concludes that it is a controversial topic from different economies that some of them agreed with supply leading policy and others argued with demand leading policy. In fact, no study in Vietnam that primary discussed and analyzed the role of banking sector development in boosting economic growth. So, this study provides new evidence from Vietnamese economy to the money supply leading. Therefore, this research widens the existing literatures through testing the influence of banking sector development on Vietnamese economic growth. 93
4. INTERNATIONAL CONFERENCE FOR YOUNG RESEARCHERS IN ECONOMICS & BUSINESS 2019 ICYREB 2019 3. Research hypothesis, Data and Methodology 3.1. Research hypothesis The research hypothesis is presented in this section. Thus, the alternative hypothesis is the fact that the explanatory variables including banking credits, banking deposit, banking capital, and interest rate have a significant influence on gross domestic product as researches of McKinnon (1973), and King and Levine (1993), and Ehikiorya and Ismailia (2014). Then, the study hypothesis should be conducted as follows: H1: There is a significant influence of banking sector indicators to gross domestic product. 3.2. Data This study tests the influence of changes in banking sector to economic growth. It can be calculated by using time series data during 2009-2017. The research data is monthly and collected from annual report of State Bank of Vietnam and the General Statistic Office of Vietnam. The choice of the time period in this research was based on the availability of official data variables in the estimated model. Moreover this study uses some financial indicators to measure the banking industry development such as banking credit (CR), banking deposits (DE), banking capital (CA), and interest rate (I) – refinancing rate announced by State Bank of Vietnam. In addition, it uses gross domestic product as a proxy of economic growth (GR). 3.3. Methodology The econometric model is used to assess the influence of banking variables on gross domestic product. Occasionally, the functional relationship between banking sector development and economic growth can certainly be verified as follows: Δ GRt = ƒ(CR, DE, CA, I) Thus, this hypothetical model can be specified including logarithm for banking indicators asfollows: Log GRt = β0 + β1Log CRt + β2Log DEt + β3Log CAt + β4 It + ett The meaning of components of formulation as below: GR: The logarithm of gross domestic product at period t. β0: Constant or intercept. β1: Coefficient effect of banking credits;. β2: Coefficient effect of banking deposits. β3: Coefficient effect of banking capital. β4: Coefficient effect of interest rate. et: Residual errors. Hence, Table 1 describes the explanatory and dependent variables that used in conceptualized the research model. Besides, it also shows the definition of some banking indicators and gross domestic products that used in estimating the research model. Table 1: Selected Variables Variable Definition Predicted sign Dependent Variable Economic Growth Growth in gross domestic product Explanatory Variables Banking credits Change in credit facilities (month to month) + Banking deposits Change in total banking deposits (month to month) + Banking capital Change in banking capital (month to month) + Interest rate The average of interest stated by the State Bank of Vietnam - 94
5. INTERNATIONAL CONFERENCE FOR YOUNG RESEARCHERS IN ECONOMICS & BUSINESS 2019 ICYREB 2019 4. Research Findings and Discussion Table 2 shows the descriptive statistics of research model. GDP has a mean value of VND 841,338 billion and deviated by 323,308. Whereas, banking credit is average VND 3,554,904 billionwith standard deviation 1,365,129. Meanwhile, banking deposit has a mean value of VND 3,878,273 billion during the research and deviated by 1,678,601. Further, banking capital had reached on average to VND 12,339 billion. On other hand, this table shows the result of Jarque- Bera test inorder to examine the goodness of fit model and the normality among research variables. It shows that the p-values for all explanatory variables are greater than significant of 5% level. Therefore, the alternative hypothesis is accepted and explanatory variables areconsistently distributed. Hence, the result reveals that the estimated model is maintained the requirements and accordance with the data variables. Table 2: Descriptive Statistics for the Variables GDP CR DE CA I Mean 841,338 3,554,904 3,878,273 12,339 0.130928 Std. Dev. 323,308 1,365,129 1,678,601 6,212 0.030455 Skewness 0.128162 0.115406 0.287129 0.151088 0.168304 Kurtosis 2.565918 2.218754 2.108087 2.348145 1.571986 Jarque-Bera 0.715065 1.189002 0.954677 1.269454 0.935677 Probability 0.722293 0.549085 0.622919 0.528757 0.490096 Observations 36 36 36 36 36 Table 3 provides information on a high level of explanation and significance of influence for the explanatory variables. The structural parameter calculated obtained implies 91.5% of GDP is explained byselected variables. The coefficient of determination (R2) shows that over 91% of variation in Vietnamese economic growth isformulated by the variation of banking indexes. Moreover,F test is 59.36 and the probability of F test value 0.000 is less than the significant of 5% level. In addition, Durbin - Watson is closed to the rule of thumb 2 and this means that there is noautocorrelation problem among the research variables. The result confirmed that formulatedmodel is correct and very well fit. Therefore, the alternative hypothesis is accepted and thec oefficients calculated from research model are stable. Table 3: The Regression Model Results (Dependent Variable: GDP) Variable t-value Coefficient Std.Error Prob. Intercept 3.80455 1.892456 0.609758 0.0037 CR 3.34341 0.389832 0.218668 0.0086 DE 0.99865 0.290682 0.332174 0.4879 CA 0.95673 0.275682 0.357583 0.6437 I -0.37278 -0.434203 1.578976 0.8968 R squared 0.915 F-statistic 59.36 Prob (F-test) 0.000 Durbin-Watson 2.0509 95
6. INTERNATIONAL CONFERENCE FOR YOUNG RESEARCHERS IN ECONOMICS & BUSINESS 2019 ICYREB 2019 Table 3 also shows that there is a significant positive relationship between banking credits supply and gross domestic product. This concludes that the rise of funding economicsectors by one percent will promote gross domestic product to rise by 3.34 percent. Therefore, this finding consolidates the results of King and Levine (1993) and Miller (1998) in case the vitalrole of banking credits and services in economic growth. However, the result shows that banking deposits does not impact on economic growth. This indicates that the rise ofcustomer deposits by one percent tend to increase output growth by 0.998 %, so thisrelation is in significant. Thus, the result reveals that interest rate has a negative relationship with economic growth and the decline of interest rate can contribute to the development of economy. 5. Conclusion Using least square model and regression analysis the researcher tested whether banking sector influences to economic growth in Vietnamese economy between 2009 and 2017. This research employed four explanatory variables to measure banking sector development such as; banking credits facilities, customer deposits, banking capital, and lending rate. It also used gross domestic product to assess the growth of Vietnamese economy. Generally, GDP is strongly impacted by some of banking indicatorsespecially banking credits facilities. This research indicated that more funding to economic sectorstends to enhance and improve economic conditions in Vietnamese partially local productivity inpublic and private sectors. Therefore, banking industry is considered one of the most important factors of Vietnamese economy. This paper recommends that Vietnamese banks should decrease their cost of debt in order to provide more domestic funding and to improve their credits policy in order to reinforce local fund raising capacity and investment. To do that, Vietnamese goverment can do some changes such as: - Building a framework of policies and credit programs towards green growth in Vietnam. - Deploying a roadmap to liberalize capital transactions cautiously and appropriately. - Thoroughly handling weak credit institutions and continue implementing measures to reduce bad debts. REFERENCES [1] Al-khatib H., and Al-saffar, H., 2013, Financial Development and Economic Growth in Jordan (2001-2012). Interdisciplinary Journal of Contemporary Research in Business.Vol 6 No.6 Pp 176- 189. [2] Anwar, S., Cooray, A. (2012), Financial development, political rights, civil liberties and economic growth: Evidence from South Asia. Economic Modelling, 29, 974-981. [3] Paola Bongini, MałgorzataIwanicz-Drozdowska, PawełSmaga and BartoszWitkowski, 2017, Financial Development and Economic Growth: The Role of Foreign-Owned Banks in CESEECountries. Sustainability. Vol. 9 pp: 335-360. [4] Calderon, C., & Liu, L., 2003, the direction of causality between financial development and economic growth. Journal of development Economics 72, 321-334. [5] Panicos Demetriades and Khaled A. Hussein Does financial development cause economic growth? Time-series evidence from 16 countries Journal of Development Economics, 1996, vol. 51, issue 2, 387-411. [6] Frikha, M and McMillan D. 2016, Banks and economic growth in developing countries: What aboutIslamic banks?Journal Cogent Economic and Finance.Vol. 4, No.1. [7] Hicks, J. (1969) A Theory of Economic History. Clarendon Press, Oxford. [8] Hshin-Yu Liang and Alan Reichert, 2006, the Relationship between Economic Growth and Banking Sector Development. Banks and Bank Systems.Vol.1 No.2. [9] Goldsmith, Raymond W. (1969). Financial Structure and Development. New Haven, CT: Yale University Press. 96
7. INTERNATIONAL CONFERENCE FOR YOUNG RESEARCHERS IN ECONOMICS & BUSINESS 2019 ICYREB 2019 [10] King, R., & Levine, R., 1993, Finance and growth. Schumpeter might be right. Policy research (Working papers, 1083). [11] Kose, M.A., Prasad, E.S., Rogoff, K., Wei, S. (2010), Financial globalization and economic policies. In: Rodrik, D., Rosenzweig, M., editors. Handbook of Development Economics.Vol. 5.NorthHolland: Elsevier B.V. p4283-4359. [12] Levine, R. (2005), Finance and growth: Theory and evidence. In: Aghion, P., Durlauf, S., editors. Handbook of Economic Growth. Netherlands: Elsevier Science. P 865-934. [13] McKinnon, R. I., 1973, Money and Capital in Economic Development Washington, D.C. Brookings Institution. [14] Merton H. Miller (1998), Financial Markets and Economic Growth. [15] Miwa, 2000, Bank and economic growth: Implications from Japanese history. [16] Patrick, H.T. (1966), Financial development and economic growth in underdeveloped countries. Economic Development and Cultural Change, 14, 174-189. [17] Prochniak and Wasiak, 2017, the impact of the financial system on economic growth in the context of the global crisis: empirical evidence for the EU and OECD countries. Empricia, Vol 44, pp: 295–337. [18] Richard H. Adams, Jr.(2003), Economic Growth, Inequality, and Poverty: Findings from a New Data Set, World Bank Policy Research Working Paper No. 2972. [19] Schumpeter, J.A. (1934), The Theory of Economic Development. London: Transaction Publishers. [20] State Bank of Vietnam, Annual report (2009-2017). [21] Vietnamese General Statistic Office, Monthly report (2009-2017). [22] Vietnamese National Financial Supervisory Commission (2016), Financial market overview in 2016. [23] Zhao, S., 2017, Does Financial Development Necessarily Lead to Economic Growth? Evidence from China’s Cities, 2007–2014.13th Global Congress on Manufacturing and Management. 97