Efficiency in the Vietnamese banking system: A DEA double bootstrap approach

•We examine efficiency in the Vietnamese banking system from 1999 to 2009.•We use the semi-parametric model of Simar and Wilson (2007).•Large banks are more efficient than small and medium sized banks.•Non-state owned banks are more efficient than state owned banks.

This study analyses bank efficiency in Vietnam from 1999 to 2009. We use a unique data sample that allows us to capture the development of the Vietnamese banking sector over the last decade. We apply an advanced methodological approach introduced by Simar and Wilson (2007) to examine bank efficiency in Vietnam. An integral part of the analysis is to explore the determinants of bank efficiency. The results indicate that large and very large banks are more efficient than small and medium sized banks with small banks having the lowest efficiency scores in the system. Non-state owned commercial banks are more efficient than state owned commercial banks assuming overall efficiency. We also argue that banks with large branch networks and those that have been in existence for a long time are less efficient than other banks.