TAILIEUCHUNG - What sources of finance constrain Vietnamese listed firms

This study is to investigate the sources of finance imposing the constraints on Vietnamese listed firms, after the introduction and rapid growth of the equity markets and the privatization wave that started since 1992. Using accounting data of listed firms on the Vietnamese stock markets, we find that listed firms are financially constrained with respect to both external funding sources, equity and long-term debt finance. | Journal of Science Ho Chi Minh City Open University - VOL. 21 1 2017 - April 2017 3 WHAT SOURCES OF FINANCE CONSTRAIN VIETNAMESE LISTED FIRMS LE LONG HAU Cantho University Vietnam - llhau@ Received March 14 2017 Revised March 24 2017 Accepted April 10 2017 ABSTRACT This study is to investigate the sources of finance imposing the constraints on Vietnamese listed firms after the introduction and rapid growth of the equity markets and the privatization wave that started since 1992. Using accounting data of listed firms on the Vietnamese stock markets we find that listed firms are financially constrained with respect to both external funding sources equity and long-term debt finance. Particularly state-owned firms do exhibit higher sensitivity coefficients of equity than private firms albeit with a non-statistically significant difference. For bank loan financing we notice that large HOSE listed state-owned firms show a sensitivity that is three times the sensitivity of the private firms. The smaller HNX listed firms however show the reverse result the private firms have a sensitivity coefficient that is twice as large as the one for the state-owned firms. Keywords Vietnam finance constraints state-dominated. 1. Introduction Information asymmetries make external finance more costly than internal finance. If financing becomes too costly firms face difficulties in raising enough capital in order to realise their investment ambitions. These firms are said to be finance constrained Fazzari et al. 1988 . In order to relax finance constraints on firms a well-functioning financial system is needed and must be established. Following other developing countries in 2000 Vietnam decided to provide an extra semi-direct financing channel through the stock market besides the existing direct financing through financial institutions 29 commercial banks and many non-bank financial institutions . However the growth of equity markets is potentially driven by speculative motives

• Tài chính doanh nghiệp
• Finance constraints
• State dominated
• Vietnamese listed firms
• Vietnamese stock markets
• Long term debt finance
• Vietnamese state dominated
• Vietnamese stock market
• Stock exchanges of Vietnam
• Supersolution Property
• Dual Formulation
• Portfolio Constraints
• Gamma Constraints
• Optimal Consumption
• Financial Markets
• Collateral Constraints
• Debt Management
• Investment Incentives
• Programming Marketing
• Earnings Management
• Tax System