Where is credit due? Legal institutions, connections, and the efficiency of bank lending in vietnam

Journal of Law, Economics, and Organization

Volumn 25, Issue 2, 2009, Pages 535-578

  Malesky, Edmund J ^a   Taussig, Markus ^b  

^a UNIVERSITY OF CALIFORNIA   (United States)

^b HARVARD BUSINESS SCHOOL   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 71949124748     PISSN: 87566222     EISSN: 14657341     Source Type: Journal    
DOI: 10.1093/jleo/ewn011     Document Type: Article

References (93)

1. Acemoglu, D., and S. Johnson. 2005. "Unbundling Institutions." 113 Journal of Political Economy 949-95.
2. Adams, D. W., D. H. Graham, and J. D. von Pischke, eds. 1984. Undermining Rural Development with Cheap Credit. Boulder, CO: Westview Press.
3. Akerlof, G.A. 1970. "The Market for"Lemons": Quality Uncertainty and the Market Mechanism." 84 Quarterly Journal of Economics 488-500.
4. Allen, F., J. Qian, and M. Qian. 2005. "Law, Finance, and Economic Growth in China." 77 Journal of Financial Economics 57-116.
5. Allen, F.R. Chakrabarti, S. De, J. Qian, and M. Qian. 2007. "Financing Firms in India." Paper presented at the Western Financial Association Annual Meeting.
6. Banerjee, A., and K. Munshi. 2002. "How Efficiently Is Capital Allocated? Evidence from the Knitted Garment Industry in Tirupur." 71(1) Review of Economic Studies 19-42.
7. Beck, T., and R. Levine. 2003. "Legal Institutions and Financial Development," in Claude Menard and Mary M. Shirley, eds., Handbook of New Institutional Economics. The Netherlands: Springer 251-278
8. Beck, T., A. Demirguc-Kunt, and R. Levine. 2005. "Finance, Firm Size, and Growth." Unpublished Manuscript, February 3.
9. - 2004a. "Financing Patterns Around the World: Are Small Firms Different?" Unpublished Manuscript, August.
10. ---. 2004b. "Financial and Legal Institutions and Firm Size." World Bank Policy Research Working Paper No. 2997. March.
11. Berger, A., and G. Udell. 2002. "Small Business Credit Availability and Relationship Lending: The Importance of Bank Organizational Structure." 112 The Economic Journal 32-53 (February).
12. ---. 1998. "The Economics of Small Business Finance: The Roles of Private Equity and Debt Markets in the Financial Growth Cycle." 22 Journal of Banking and Finance 613-73.
13. ---. 1995. "Relationship Lending and Lines of Credit in Small Firm Finance." 68(3) The Journal of Business. 351-381.
14. Berger, A., L. Klapper, and G. Udell. 2001. "The Ability of Banks to Lend to Informationally Opaque Small Businesses." 25 Journal of Banking and Finance 2127-67.
15. Berger, A., R. Demsetz, and P. Strahan. 1999. "The Consolidation of the Financial Services Industry: Causes, Consequences, and Implications for the Future." 23 Journal of Banking and Finance 135-94.
16. Carlier, A., and T.T. Son. 2005. "Firm Dynamism: Beyond Registration-How Are Vietnam's New Domestic Private Firms Faring?" Vietnam Private Sector Development Policy Note. Hanoi, Vietnam: World Bank.
17. Cull, R., and L.C. Xu. 2005. "Institutions, Ownership, and Finance: The Determinants of Profit Reinvestment Among Chinese Firms." 77 Journal of Financial Economics 117-46.
18. Cull, R., L. Davis, N. Lamoreaux, and J. Rosenthal. 2004. "Historical Financing of Small and Medium Size Enterprises." Presented at World Bank Conference "Small and Medium Enterprises: Overcoming Growth Constraints," October 14-15.
19. De Soto, Hernando. 2000. The Mystery of Capital. New York: Basic Books.
20. Diamond, Douglas. 1991a. "Debt Maturity Structure and Liquidity Risk." 106 The Quarterly Journal of Economics 709-37.
21. ---. 1991b. "Monitoring and Reputation: The Choice between Bank Loans and Directly Placed Debt." 99 The Journal of Political Economy 689-721.
22. Do, T., and L. Iyer. 2003. "Rural Vietnam in Transition." 3120 World Bank Policy Research Paper, May.
23. Dufhues, Thomas. 2003. "Transformation of the Financial System in Vietnam and its Implications for the Rural Finance Market: An Update." 7 Journal of Institutional Innovation and Development 29-41.
24. Fan, J., T.J. Wong, and T. Zhang. 2005. "Politically-Connected CEOs, Corporate Governance, and Post-IPO Performance of China's Partially Privatized Firms." Chinese University of Hong Kong Working Paper.
25. Fisman, R. 2001. "Estimating the Value of Political Connections." 91 The American Economic Review 1095-1102
26. ---. 2003. "Ethnic Ties and Provision of Credit: Relationship-Level Evidence from African Firms." 3(1) Advances in Economic Analysis and Policy 1-17.
27. Franks, J., C. Mayer, and S. Rossi. 2003. "The Origination and Evolution of Ownership and Control." Oxford Financial Research Centre Working Paper No. 1003-FE-01.
28. Freeman, N.J. 2005. "Vietnam: Financial Sector Reform." 25 William Davidson Institute Policy Brief, University of Michigan, January.
29. Gainsborough, M. 2004. "Ho Chi Minh City's Post-1975 Political Elite: Continuity and Change in Background and Belief," in B. Kerkvliet and D. Marr, eds., Beyond Hanoi: Local Government in Vietnam. Singapore: Institute of Southeast Asian Studies 259-285
30. General Statistics Office (GSO). 2006. Statistical Yearbook. Hanoi, Vietnam: Statistics Publishing House. http://www.gso.gov.vn
31. ---. 2005. The Real Situation of Enterprises Through the Results of Surveys Conducted in 2001, 2002, 2003, and 2004. Hanoi, Vietnam: Statistics Publishing House.
32. Gerschenkron, Alexander. 1962. Economic Backwardness in Historical Perceptive: A Book of Essays. Cambridge Mass.: Harvard University Press.
33. Giannetti, Mariassunta. and Steven R.G. Ongena. 2005. "Financial Integration and Entrepreneurial Activity: Evidence from Foreign Bank Entry in Emerging Markets." 498 ECB Working Paper.
34. Greif, A. 1989. "Reputations and Coalitions in Medieval Trade: Evidence on the Maghribi Traders," 61 Journal of Economic History 1-35.
35. ---. 1993. "Contract Enforceability and Economic Institutions in Early Trade: The Maghribi Traders Coalition," 83 (3) American Economic Review 525-548
36. Guiso, L., P. Sapienzo, and L. Zingales. 2000. "The Role of Social Capital in Financial Development." National Bureau of Economic Research Working Paper No. 7563.
37. Hansen, H., J. Rand, and F. Tarp, 2004. "SME Growth and Survival in Vietnam: Did Direct Government SupportMatter?" 04-13 University of Copenhagen, Institute of Economics, Discussion Paper.
38. Hemlin, M., B. Ramamurthy, and P. Ronnas. 1998. "The Anatomy and Dynamics of Small Scale Private Manufacturing in Vietnam." Working Paper Series in Economics and Finance No. 236, Stockholm School of Economics.
39. Huang, Y. 2006. "Do Financing Biases Matter for the Chinese Economy?" 26 Cato Journal 287-306.
40. International Monetary Fund (IMF). 2005. IMF Country Report No. 05/148, Hanoi, Vietnam. May.
41. Jaffee, D., and Russel L.T. 1976. "Imperfect Information, Uncertainty and Credit Rationing." 90 Quarterly Journal of Economics 651-66.
42. Jayaratne, J., and P. Strahan. 1996. "The Finance-Growth Nexus: Evidence from Bank Branch Deregulation." 111 The Quarterly Journal of Economics 639-70.
43. Johnson, S., J. McMillan, and C. Woodruff. 2002. "Courts and Relational Contracts." 18 Journal of Law, Economics, and Organization 221-277
44. King, R., and R. Levine. 1993. "Finance, Entrepreneurship and Growth: Theory and Evidence." 32 Journal of Monetary Economics 513-42.
45. ---. 1993b. "Finance and Growth: Schumpeter May Be Right." 108 The Quarterly Journal of Economics 717-37.
46. Kokko, A., and F. Sjoholm. 2004. "The Internationalization of Vietnamese SMEs." 193 The European Institute of Japanese Studies Working Paper Series, October.
47. Laeven, L. 2001. "Insider Lending and Bank Ownership: The Case of Russia." 29 Journal of Comparative Economics 207-99.
48. La Porta, Rafael, Florencio Lopez-de-Silanes, and Guillermo Zamarripa 2003. "Related Lending." 118(1) Quarterly Journal of Economics 231-268.
49. La Porta, Rafael, Florencio Lopez-de-Silanes, and Andrei Shleifer. 2000. "Government Ownership of Banks." National Bureau of Economic Research Working Paper Series No. 7620.
50. La Porta, Rafael, Florencio Lopez-de-Silanes, Andrei Shleifer, and Robert Vishny. 1998. "Law and Finance," 106 Journal of Political Economy 1113-55.
51. La Porta, Rafael, Florencio Lopez-de-Silanes, Andrei Shleifer, and Robert Vishny 1997. "Legal Determinants of External Finance." 52 Journal of Finance 1131-1150.
52. Le, N.T.B., S. Venkatesh, and T. Nguyen. 2006. "Getting Bank Financing: A Study of Vietnamese Private Firms." 23 Asia Pacific Journal of Management 209-77.
53. Lerner, Josh, and Antoinette Schoar. 2004. "Transaction Structures in the Developing World: Evidence from Private Equity" (February 2004). MIT Sloan Working Paper No. 4468-4504
54. Lerner, Josh and Antoinette Schoar 2005. "Does Legal Enforcement Affect Financial Transactions? The Contractual Channel in Private Equity". 120(1) The Quarterly Journal of Economics 223-246.
55. Mai Anh. 2005. "Vietnam's Banking Sector Remains Weak on a Global Scale: Standard and Poor." Vietnam Business Forum. June 21.
56. Ministry of Labor, Invalids, and Social Affairs (MOLISA). 2005. Statistical Yearbook of Invalids and Social Affairs. Hanoi, Vietnam: Labor-Social Publishing House. http://www.molisa.gov.vn/
57. McKinnon, R.I. 1973. Money and Capital in Economic Development. Washington, DC: Brookings Institute.
58. McMillan, John, and Chris Woodruff. 1999a. "Dispute Prevention without Courts in Vietnam." 15 Journal of Law, Economics, and Organization 637-658
59. ---. 1999b. "Interfirm Relationships and Informal Credit in Vietnam." 114(4) The Quarterly Journal of Economics 1285-320.
60. Mekong Capital. 2003. "Programs to Assist Private SMEs in Vietnam." http://www. mekongcapital.com/
61. Nguyen, D.C., Pham, A.T., Bui, V., and D. Dapice. 2004. Why Don't Northern Provinces Grow Faster? Hanoi, Vietnam: Central Institute for Economic Management (CIEM) and United Nations Development Program.
62. O'Connnor, D. 2000. "Financial Sector Reform in China and Vietnam: A Comparative Perspective." 42(4) Comparative Economic Studies 45-66 (Winter).
63. Patrick, H.T. 1966. "Financial Development and Economic Growth in Underdeveloped Countries." 14(2) Economic Development and Cultural Change 174-189
64. Petersen, Mitchell A., and Raghuram G. Rajan. 1994. "The Benefits of Lending Relationships: Evidence from Small Business Data." 49(1) The Journal of Finance 3-37 (March).
65. Rajan, R. 1992. "Insiders and Outsiders: The Choice between Informal and Arm's Length Debt." 47 The Journal of Finance 1367-400.
66. Rand, J. 2005. "Credit Constraints and Determinants of the Cost of Capital in Vietnamese Manufacturing." Working Paper, University of Copenhagen.
67. Robertson, S. 2006. "Land Tenure for the Private Sector." Unpublished Manuscript.
68. Sapienza, Paola 2004. "The Effects of Government Ownership on Bank Lending." 72 The Journal of Financial Economics 357-84.
69. Schumpeter, J.A. 1934. Theory of Economic Development Cambridge, MA: Harvard University Press.
70. Schumpeter, J.A. 1912. Theorie der Wirtschaftlichen Entwicklung, Liepzig: Duncker and Humblot. Revised English translation by Redvers Opie, The Theory of Economic Development. Cambridge, MA: Harvard University Press, 1934.
71. Sherif, K., M. Borish, and A. Gross. 2003. State-owned Banks in the Transition: Origins, Evolutions, and Policy Responses: Washington, DC: World Bank.
72. Stiglitz, J., and A. Weiss. 1981. "Credit Rationing in Markets with Imperfect Competition." 71 The American Economic Review 393-410.
73. Tenev, S., A. Carlier, O. Chaudry, and Q.T. Nguyen. 2003. Informality and the Playing Field in Vietnam's Business Sector. Washington, DC: World Bank and International Finance Corporation.
74. Taussig, M. 2005. "Domestic Companies in Vietnam: Challenges for Development of Vietnam's Most Important SMEs." 34 William Davidson Institute Policy Brief, September.
75. Tin Nhanh Chung Khoan. 2008. "Stock market cap tipped to breach 60% by 2010." January 18. http://www.intellasia.net/news/articles/stock-market/ 111239318.shtml (accessed January 25,2008).
76. Tomz, M., J. Wittenberg, and G. King. 2003. CLARIFY: Software for Interpreting and Presenting Statistical Results, Version 2.1. Stanford University, University of Wisconsin, and Harvard University, January 5. http://gking.harvard.edu.
77. Transparency International. 2006. Corruption Perceptions Index. Berlin, Germany: Transparency International. http://www.transparency.org/news-room/in- focus/cpi-2006/cpi-table. June 2, 2008
78. Tsai, K.S. 2002. "Back-Alley Banking: Private Entrepreneurs in China." Ithaca: Cornell University Press.
79. Uzzi, Brian 1997. "Social Structure and Competition in Interfirm Networks: The Paradox of Embeddedness." 42 Administrative Science Quarterly 35-67.
80. Vietnam Competitiveness Initiative (VNCI). 2005. The Vietnam Provincial Competitiveness Index: Measuring Economic Governance for Private Sector Development. 2005 Final Report, Policy Paper 4. Hanoi, Vietnam.
81. ---. 2006. The Vietnam Provincial Competitiveness Index: Measuring Economic Governance for Private Sector Development. 2006 Final Report, Policy Paper 11. Hanoi, Vietnam.
82. ---. 2007. The Vietnam Provincial Competitiveness Index: Measuring Economic Governance for Private Sector Development. 2007 Final Report, Policy Paper 12. Hanoi, Vietnam.
83. ---. 2005-2007. Provincial Competitiveness Index Survey of 6700 firms in all of Vietnam's 64 provinces. Survey instrument and methodology can be obtained at http://www.pcivietnam.org/.
84. Vietnam Economic Times. 2003. Banks Keep Track of Developments. www.vneconomy.com (accessed April 1).
85. Vu Thanh Tu Anh. 2005. "Vietnam-The Long March to Equitization." William Davidson Institute Policy Brief No. 33, April.
86. Weingast, B.R., 1992. "The Economic Role of Political Institutions." 46 Institute for Policy Reform Working Paper.
87. ---. 1993. "Constitutions as Governance Structures: The Political Foundations of Secure Markets." 146 Journal of Institutional and Theoretical Economics 286-311.
88. ---. 1998. "The Political Foundations of Democracy and the Rule of Law." 91 American Political Science Review 245-264 World Bank, 2005.
89. World Development Indicators 2005. World Bank: Washington, DC. World Bank, 2004a. Vietnam Development Report 2005: Governance. Joint Donor Report to the Vietnam Consultative Group Meeting, Hanoi, December 1-2, 2004.
90. World Bank, 2004b. "Vietnam Bank for Social Policies." Financial Sector Policy Note, Hanoi, Vietnam: World Bank.
91. World Bank. 2006a. Doing Business (DB): Comparing Business Regulations. Washington, DC: Oxford University Press. http://www.doingbusiness.org/. June 2, 2008.
92. World Bank. 2006b. World Development Indicators, Washington DC. http://devdata.worldbank. org/dataonline/.
93. World Bank. 2006c. Vietnam Investment Climate Assessment. Hanoi, Vietnam: World Bank.