Significance of monetary policy on firms’ external finance in Vietnam

Phan Gia Quyen, Bui Van Huy
Received: 18/05/2017   Revised: 12/08/2017   Accepted: 20/08/2017   Mã số: E52 . E58 . G21 . G32.
Abstract: This paper investigates the effect of monetary policy on firms’ external finance. Using dataset of 241 Vietnamese listed firms in the period 2006-2014 and two-step system GMM method, the results show that contractionary monetary policy has decreased firms’ external finance. Firms’ characteristics such as size, leverage, liquidity and macroeconomic conditions are important determinants of firms’ accessibility to external finance. These effects are different between financially constrained firms and non-financially constrained firms. Finally, there is no evidence about the asymmetry effects of monetary policy on the firms’ accessibility to external finance in Vietnam.
Keywords: monetary policy, external finance, firms’ characteristics, financial constraints, GMM.
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