International Journal of Analysis and Applications | 2026
Authors: Hoang H.T.T.; Do H.T.T.; Pham T.T.
DOI: 10.28924/2291-8639-24-2026-179
Journal: International Journal of Analysis and Applications
Year: 2026
Publisher: Etamaths Publishing
Document Type: Article
Open Access: All Open Access; Gold Open Access
Cited by: 0
The study examines how digital transformation and adverse weather events affect bank loan costs in Vietnam. Using an unbalanced panel of 20 commercial banks from 2012–2023, it constructs a Digital Transformation Index from annual report keywords and applies fixed-effects, system GMM, and two-way clustered regressions. Results show that digital transformation significantly reduces loan costs, suggesting gains in operational efficiency, lower information asymmetry, and reduced transaction and monitoring expenses. In contrast, climate-related variables, especially the climate change indicator, increase loan costs by elevating credit risk and provisioning needs. The positive, significant interaction between digital transformation and climate shocks indicates that the cost-reducing effect of digitalization is partially weakened under extreme weather conditions. GDP growth is associated with lower loan costs, while funding diversification and capitalization yield mixed effects; higher inflation raises lending costs, whereas larger bank size and income diversification help reduce them. Overall, the findings highlight the need to accelerate digital adoption while strengthening climate resilience to enhance credit affordability and financial stability in emerging economies. © 2026, Etamaths Publishing. All rights reserved.