ESP The 28th Young Scholars’ Workshop
Date: Wednesday, January 31, 2018
Time: 12:30 – 14:00
Venue: GRIPS 4th floor, 4B
Presenter: Trinh Quang Long, Consultant, Asian Development Bank Institute
(Tentative) Title: Can access to formal credit make a high-growth firm? Empirical evidence from Vietnam
Abstract: Recently, there are a growing interest in understanding and analyzing firm growth among SMEs, especially as regards the high growth firms. Various studies have shown that such a relative small number of high growth firms are the ones that disproportionately generate more jobs. This paper examines the role of access to formal credit in explaining firm growth. More specifically, we attempt to answer two questions. First, do access to formal credit make a high-growth firm; alternatively, is inability to access to formal credit a factor that explains some firms experienced a very low-growth rate. Second, do access to formal credit systematically affect the location and overall shape of the (conditional) distributions of firm growth rates. To achieve such purposes, we use a unique firm-level data collected very every two years from 2005 through 2013 in Vietnam. Our empirical results show some evidence on the contribution of bank credit in making a “gazelle” firm. Moreover, we also find that the effect of credit access on firm growth is more pronounced for firms in the upper quantiles.