Impacts Of Finance Access On Firm Performance - Evidence From Vietnam

Abstract

This study undertakes an empirical investigation to examine how access to finance influences the growth of companies in Vietnam. To accomplish this, we utilized a comprehensive dataset obtained from the World Bank's Enterprise Surveys, consisting of detailed information at the enterprise level. Both subjective and objective measures of access to finance were employed. The data used in this study encompasses a sample of 1000 firms located throughout Vietnam. The subjective measure was determined based on the assessment of whether access to finance posed a significant obstacle to business operations. The objective measure, on the other hand, evaluated whether firms faced constraints in obtaining credit. The findings of the study indicate a noteworthy negative impact of access to finance constraints on firm growth. Specifically, firms that were not constrained in obtaining credit experienced faster growth compared to credit-constrained firms. These results lend support to the notion that financing plays a crucial role in facilitating firm growth and highlight the need for implementing adjustments to increase financial accessibility for Vietnamese firms.