Purpose This study aims to investigate how innovation and gender diversity, both at the board and executive levels, affect Vietnamese banks’ stability efficiency. Bank stability efficiency is defined as the degree to which banks can effectively maintain financial resilience and mitigate institutional risk. In addition to examining their individual effects, this study explores the moderating role of gender diversity in the relationship between innovation and bank stability efficiency. Design/methodology/approach This research covers a panel of 23 commercial banks in Vietnam over a 17-year period from 2007 to 2023 using the Tobit regression method. Findings The findings show that internal innovation and gender diversity at both board and executive levels are positively associated with bank stability efficiency. Banks with strong research and development (R&D) investment and inclusive leadership demonstrate greater financial resilience. Notably, gender diversity strengthens the positive effect of innovation on stability. These results indicate robustness across various model specifications and sensitivity analyses, reinforcing the study’s validity and relevance. Originality/value This study offers a novel contribution by jointly examining the impact of innovation and gender diversity on bank stability efficiency in a transitional economy. By applying the stochastic frontier approach, it addresses methodological limitations of traditional risk measures and provides a further precise estimation of financial resilience. The findings highlight the value of inclusive governance and internal R&D investment in enhancing long-term bank stability, offering practical insights for policymakers and bank leaders in emerging markets.
Nguyen et al. (Tue,) studied this question.