Political patronage and corporate leverage: Empirical evidence from Vietnamese listed companies

Abstract

Since the open-door policy of 'Doi Moi' was launched in 1986, Vietnam has made great strides, from among the world’s most impoverished nations to a lower middle-income country. During the development process, there is a growing tendency towards the co-operation between the public and private sectors with the emergence of state-owned and state-controlled enterprises. Previous literature have shown that politically patronised firms tend to gain better access to credit markets than others, owing to either established connections with financial intermediaries or state influence within major banks.