Please use this identifier to cite or link to this item: https://dspace.agu.edu.vn:8080/handle/agu_library/12814
Title: Are politically connected firms less constrained in credit markets?
Authors: Rand, John
Keywords: Credit constraints
Political connections
Vietnam
Issue Date: 2017
Series/Report no.: UNU-WIDER Working Paper 200/2017;pp. 1 - 18
Abstract: Utilizing a panel of over 2,000 Vietnamese SMEs over a 10-year period, we analyse the importance of being politically connected on both access and cost-of-credit obtained from formal financial institutions. Controlling for unobserved time-invariant firm-level heterogeneity, productivity self-selection concerns, and access to alternative credit markets, we show that political connections decreases the likelihood of being credit-constrained by 4 percentage points. Moreover, politically connected firms accessing credit face lower cost-of-capital than non-connected SMEs not excluded from formal financial markets. However, the impact of political connections is most valuable during periods of financial distress, but less prevalent during business cycle upswings.
URI: http://dspace.agu.edu.vn:8080/handle/agu_library/12814
Appears in Collections:Economic development

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