Do Vietnamese state-dominated listed firms face finance constraints?

Abstract

Using accounting data of listed firms on the Vietnamese stock market this study documents that listed Vietnamese firms still face finance constraints, even after the introduction and rapid growth of the equity markets and the privatization wave that started since 1992. Contrary to most of the existing literature, especially large state-dominated firms were documented to be significantly more financially constrained.The cash flow sensitivity differences between the statedominated and private firms are economically large but statistically not significant.These findings are still consistent for both stock exchanges of Vietnam (HOSE and HNX).

Cash flows – investment sensitivity under financial constraints: The case of Vietnam

“…In this paper, we focus on Vietnamese market, where the corporate bond market is underdeveloped; equity market is blooming but too small to meet capital demand from firms [1]. According to 2017 report of General Statistics office of Vietnam, a large number of Vietnamese firms have to base on short-term bank loans as the main resources to finance their activities.…”