Formality and Financing Patterns of Small and Medium-Sized Enterprises in Vietnam

Archer, Lan

doi:10.1080/1540496x.2019.1658576

Cited by 13 publications

(12 citation statements)

References 29 publications

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“…It is firmly believed that credit is a crucial issue of operating and running enterprises (e.g. Archer, 2019;Nguyen and Phan, 2015). "Without adequate access to financing, the staying power of the business and its potential for growth is jeopardised" (Rahaman, 2011, p. 709).…”

Section: Literature Reviewmentioning

confidence: 99%

“…Extant literature has documented the importance of financing channels in a firm's business operations (e.g. Archer, 2019;Lemma, 2015;Liu et al, 2015). This study captures SME financing patterns by taking the logarithm of formal liabilities, informal liabilities, owner's equity funding and retained earnings.…”

Section: Econometric Strategymentioning

confidence: 99%

“…In the context of a rapid growth of the national economy, SMEs have played a crucial role in the socio-economic development, which has been documented in various studies on Vietnam (e.g. Archer, 2019;Nguyen et al, 2016). SMEs contribute to GDP, create employment, produce a large number of products for the society, raise social resources for investments, reduce poverty and develop networks with most sectors (CIEM, 2014).…”

Section: Introductionmentioning

confidence: 99%

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Corruption and SME financing structure: the case of Vietnamese manufacturing

Phan

Archer

2020

JED

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PurposeCorruption has been evidenced as one of the major factors that drive a firm's dynamics and growth. This study examines the relationship between corruption and financing structure decisions of small and medium-sized enterprises (SMEs) in Vietnam.Design/methodology/approachThe authors use a longitudinal data set from the Vietnam's SME Survey in the period 2007–2013 and adopt the two-stage least squares method to deal with endogeneity.FindingsAfter controlling for endogeneity and firm heterogeneity, the authors find that, overall, corruption does significantly affect the decisions of financing sources. Given that, corruption increases the use of informal debt and decreases the levels of formal debt, owner's equity and retained earnings.Practical implicationsThe findings suggest implications for corruption-combating actions and policies.Originality/valueDifferent from previous studies that either provide evidence of government corruption and a firm's capital structure at the country level or focus on corruption and debt only, we deliver a more comprehensive analysis on the nexus between corruption and various financing sources.

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Section: Literature Reviewmentioning

confidence: 99%

Section: Econometric Strategymentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Corruption and SME financing structure: the case of Vietnamese manufacturing

Phan

Archer

2020

JED

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“…Data and information cover almost all firmrelated issues, such as enterprise history, household characteristics, production characteristics, sales structure and export, employment, investments and credit, networks, economic constraints, and potentials, among others. The survey has been widely used in previous studies on SMEs in Vietnam (Archer, 2019;Hansen et al, 2009;Rand, 2007;Nguyen et al, 2019).…”

Section: Datamentioning

confidence: 99%

Labor productivity of household businesses in Vietnam

Hien¹

2021

Int. j. adv. appl. sci.

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This study aims to investigate the factors affecting the labor productivity of household businesses in Vietnam. By using data from the 2015 Small and Medium Scale Manufacturing Enterprises in Vietnam, the authors found that labor productivity was affected by a number of firms' and owners' characteristics, including firm size, firm age, investment, competition, networking, female share, salary, and owner's age. The study further examined the effects of these determinants on labor productivity through different quantiles (25 th , 50 th , and 75 th quantiles). Policy implications were discussed.

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“…*Business formality is considered a key driver in the development of the private sector and business environment in developing countries (Archer, 2019;Bui et al, 2018;Rand et al, 2014). Firms' decision to formalize depends on the net benefits of registration and the costs of money, time, and information (De Mel et al, 2013;McKenzie and Sakho, 2010).…”

Section: Introductionmentioning

confidence: 99%

Formality and investments: Evidence of Vietnamese SMEs

Phan¹,

Hien²

2021

Int. j. adv. appl. sci.

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Business formality is considered a key driver in the development of the private sector in developing countries, which can contribute to enhancing the capacity and competitiveness of firms. The purpose of this paper is to investigate the impact of formality on investments of small and medium-sized enterprises (SMEs) in Vietnam. Different from previous work, we apply a two-stage method with random-effects Probit and Tobit regressions to control for endogeneity surrounding formality and investments. Results show that formality measured by having a tax code fosters all types of investments. However, formality proxied by having a full set of business registration documents decreases total and fixed investments but increases non-fixed investments. Our findings suggest that relaxing complex procedures, enhancing the knowledge of the owner, and improving the ease of doing business play a crucial role in the formalization of Vietnamese SMEs.

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Formality and Financing Patterns of Small and Medium-Sized Enterprises in Vietnam

Cited by 13 publications

References 29 publications

Corruption and SME financing structure: the case of Vietnamese manufacturing

Corruption and SME financing structure: the case of Vietnamese manufacturing

Labor productivity of household businesses in Vietnam

Formality and investments: Evidence of Vietnamese SMEs

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