In this paper, we investigate the determinants of household borrowing from the formal financial sector, the determinants of credit rationing by the formal sector and the impact of credit on household welfare in rural Vietnam. We find that education, savings, the area devoted to farming and the availability of formal credit are important determinants of both household borrowing and credit rationing by the formal sector. We also find that credit has a positive (albeit small) effect on household welfare in rural Vietnam. Our findings have policy implications for land and banking sector reform.
Our paper employs a data set that comprises real‐time data, which, in our study, is defined as the best known data available to investors at the time of making decision. The research was inspired by comments by industry leaders at an international conference in finance in Vietnam in 2016, basically implying that academic research findings were not useful to investors because they had not done in the way that investors think and do. Drawing on an alike experiment study using real‐time data for a period from October 2010 to April 2014, our paper documents that the value and liquidity effect do not exist in Vietnam, and the size effect is weak. Specifically, we find that growth and high‐liquidity stocks outperform and do not find strong evidence for the outperformance of small stocks. This finding contradicts the general literature, which suggests that value, low liquidity, and small stocks outperform but supports similar contradicting findings for emerging markets. The findings from our research are important to investors in Vietnam market because they are drawn on the decision‐making basis that investors in this market normally do. Our research findings also suggest the use of a multifactor pricing model that is relevant for valuing stocks in Vietnam. In addition, to check the reliability of our data set and the robustness of our conclusions, we repeated the same procedure using two samples of historical data and compared with results from our data. The additional analysis confirms the reliability of our data and findings.
The positive relationship between access to credit and household welfare has been well explored and documented in the literature. The literature however sees just few research papers about Vietnam. One issue with most research papers in this area however is that while the conclusions are consistent, they mostly draw their findings from the analysis of cross-section data obtained from household surveys. Such an analysis represents a snapshot view and does not tell us much about the long-term impact of access to credit on household welfare. In this paper, we develop an econometric framework to test the impact of access to credit on household welfare in the long-run using data from two household surveys in Vietnam. The first survey covers a sample of 4,799 households, 150 communes and 300 villages over the country. The second survey, taken after 5 years, covers a sample of 5,999 households, 194 communes and 388 villages, including all households surveyed in the first survey. Our econometric framework considers and controls for the effect of endogenous credit and of the sample selection bias. We employ a three stage regression: the first stage controls for the sample selection bias; the second stage controls for the endogeneity of credit; and the third stage is to estimate the impact of access to credit on household welfare, where the inverse Mill's ratios and the predicted residuals, which are computed from the first and second stages, are included as explanatory variables. We find that access to credit has a positive and significant longterm impact on household welfare in terms of per capita expenditure, per capita food expenditure and per capita non-food expenditure. We also find that although both formal and informal credit contribute to household welfare, formal credit has a relatively higher impact than its informal counterpart. Our findings imply some policy recommendations. On the one hand, the findings encourage policies that improve the access to credit for poor households in rural areas. On the other hand, the low level of impact suggests that the subsidized credit should be reconsidered.JEL Classifications: Q14, O16, and O18
A B S T R A C TThis study examines the day-of-the-week trading patterns of individual and institutional investors. Consistent with previous evidence, we find an increase in the proportion of Monday trading volume attributable to individual investors relative to other days of the week. However, we document that this increase results from a reduction in trading by institutional investors, rather than from an absolute increase in trading by individual investors. In fact, the absolute trading volume by individual investors is significantly lower on Monday than on any other weekday. We also document that the degree of day-of-the-week effect varies with the quality and dissemination of public information proxied by the market capitalization of each company.
La reproduction ou représentation de cet article, notamment par photocopie, n'est autorisée que dans les limites des conditions générales d'utilisation du site ou, le cas échéant, des conditions générales de la licence souscrite par votre établissement. Toute autre reproduction ou représentation, en tout ou partie, sous quelque forme et de quelque manière que ce soit, est interdite sauf accord préalable et écrit de l'éditeur, en dehors des cas prévus par la législation en vigueur en France. Il est précisé que son stockage dans une base de données est également interdit.
scite is a Brooklyn-based organization that helps researchers better discover and understand research articles through Smart Citations–citations that display the context of the citation and describe whether the article provides supporting or contrasting evidence. scite is used by students and researchers from around the world and is funded in part by the National Science Foundation and the National Institute on Drug Abuse of the National Institutes of Health.
hi@scite.ai
10624 S. Eastern Ave., Ste. A-614
Henderson, NV 89052, USA
Copyright © 2024 scite LLC. All rights reserved.
Made with 💙 for researchers
Part of the Research Solutions Family.