Similarities and differences of credit access by Vietnamese and Chinese firms

Phuong Nu Minh Le, Xiaoqin Wang

Abstract


Using a World Bank Enterprise Survey 2005 in Vietnam and China, this research investigates the similarities and differences in credit access of Vietnamese and Chinese businesses. The authors found that Chinese banks evaluate loan application based on business performance while Vietnamese banks do not. The results indicate that credit quota in China creates more discrimination than the DAF program in Vietnam. Both Chinese and Vietnamese businesses get rid of trade credit in the informal market, the probability of credit access simultaneously increase in combination with the use of trade credit in both Vietnamese and Chinese businesses. The authors also found that Central North in Vietnam and Southwest in China are the two regions with relatively underdeveloped economic but have more possibility of credit access than other regions across Vietnam and China. Therefore, further research is recommended to deeply investigate the comparative advantages of these regions and the possibilities to replicate this lesson to other regions.

Keywords


SMEs; credit access; Vietnam and China.

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DOI: http://dx.doi.org/10.18533/ijbsr.v3i5.18

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International journal of business and social research (Print)
ISSN 2164-2540

International journal of business and social research (Online)
ISSN 2164-2559

[International Journal of Business and Social Research (IJBSR) previously published by MIR Center for Socio-Economic Research, MD, USA. From February 2018 this journal is published by the LAR Center Press, OR, USA]