[Seminar 2021.02] Financial constraints and export decisions: The case of Vietnam

In this seminar, Dr. An Duong will present her research on the paper titled, “Financial constraints and export decisions: The case of Vietnam”, co-authored with Clements Kool (Maastricht University) and Lu Zhang (CPB Netherlands Bureau of Economic Policy Analysis). Dr Duong holds a Ph.D. degree in Economics from Utrecht University, Netherlands, and she is currently a Lecturer at Faculty of Finance, Banking University of Ho Chi Minh City, Vietnam.

Abstract

This paper examines the impact of financial constraints and productivity on the decision to export for a large sample of Vietnamese firms over the period 2009-2014. We show that financial constraints –proxied by the leverage ratio and the tangible asset ratio –are significant determinants of the export decision. Three findings stand out. First, we find a significant inverse U-shaped relationship between leverage and the export probability for private manufacturers, suggesting that low as well as high indebtedness may signal lack of access to external finance. Second, we show that financial constraints matter for the decision to start exporting as well as for the decision to stop exporting. Third, we find that medium and high productive firms are more sensitive to financial constraints than low productive firms.

Contact Us to join the seminar