Financial Health and Firm Productivity: Firm-Level Evidence from Viet Nam

20 Pages Posted: 23 Sep 2013

See all articles by Shandre M. Thangavelu

Shandre M. Thangavelu

National University of Singapore (NUS) - Department of Economics

Aekapol Chongvilaivan

Asian Development Bank

Date Written: September 23, 2013

Abstract

This paper empirically investigates whether financial health shores up firm productivity. It presents productivity as another driving factor in translating financial development into real economic progress. The authors’ empirical framework employs Levinsohn and Petrin’s (2003) semi-parametric estimation of total factor productivity (TFP) using firm-level panel data during 2002-2008, and incorporates financial health variables into conventional determinants of firm productivity. The findings suggest that liquidity and access to external credit boosts firm productivity, with the latter particularly imperative for exporting and/or importing firms.

Keywords: financial health, total factor productivity, financial development

JEL Classification: O16, O25, O53

Suggested Citation

Thangavelu, Shandre Mugan and Chongvilaivan, Aekapol, Financial Health and Firm Productivity: Firm-Level Evidence from Viet Nam (September 23, 2013). ADBI Working Paper 434. Available at SSRN: https://ssrn.com/abstract=2329542 or http://dx.doi.org/10.2139/ssrn.2329542

Shandre Mugan Thangavelu (Contact Author)

National University of Singapore (NUS) - Department of Economics ( email )

1 Arts Link, AS2 #06-02
Singapore 117570, Singapore 119077
Singapore

Aekapol Chongvilaivan

Asian Development Bank ( email )

6 ADB Avenue, Mandaluyong City 1550
Metro Manila
Philippines

HOME PAGE: http://www.adb.org/

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