The trilogy between CEO overpower, green credit, and core competence: Evidence from commercial banks in Vietnam

Khoa Dang Duong; Phuc Huu Truong; Diep Van Nguyen; Ai Ngoc Nhan Le

doi:10.1016/j.heliyon.2023.e20445

The trilogy between CEO overpower, green credit, and core competence: Evidence from commercial banks in Vietnam

Heliyon. 2023 Sep 26;9(10):e20445. doi: 10.1016/j.heliyon.2023.e20445. eCollection 2023 Oct.

Authors

Khoa Dang Duong¹, Phuc Huu Truong¹, Diep Van Nguyen², Ai Ngoc Nhan Le³

Affiliations

¹ Faculty of Finance and Banking, Ton Duc Thang University, Ho Chi Minh City, Viet Nam.
² Faculty of Finance and Banking, Ho Chi Minh City Open University, Ho Chi Minh City, Viet Nam.
³ Faculty of Finance and Banking, Van Lang University, Ho Chi Minh City, Viet Nam.

Abstract

This paper investigates the interconnection between Chief Executive Officer (CEO) power, green credit, and core competence of commercial banks in Vietnam. Our data sample consists of 373 annual observations from 2010 to 2021. We employ a dynamic system Generalized Method of Moments to analyze an unbalanced panel comprised of 373 annual observations from 2010 to 2021. The findings indicate an inverse U-shape relationship between CEO overpower and commercial banks' core competence. Moreover, the study reports that banks with green lending activities reduce core competence by about 0.1598 points more than other banks. In addition, the results indicate that CEO power moderates the relationship between green credit and core competence. Our findings align with stewardship, management entrenchment, first-mover advantage, stakeholder theories, and prior literature. The study has practical implications for policymakers to develop the banking system sustainably in emerging markets.

Keywords: Banks; CEO overpower; Core competence; Green credit; Vietnam.