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The impact of local financial development and corruption control on firm efficiency in Vietnam: evidence from a geoadditive stochastic frontier analysis

Author

Listed:
  • Rouven E. Haschka

    (University of Cologne)

  • Helmut Herwartz

    (University of Göttingen)

  • Clara Silva Coelho

    (University of Hamburg)

  • Yabibal M. Walle

    (German Institute of Development and Sustainability (IDOS))

Abstract

In this paper, we use a geoadditve Bayesian stochastic frontier analysis to empirically assess the impact of provincial-level financial development, corruption control, and their interaction on firm efficiency in Vietnam. Using panel data from more than 40,000 Vietnamese firms during 2006-2013, we find that financial development decreases firm efficiency, while corruption control promotes it. Moreover, financial development and corruption control interact positively in affecting firm efficiency. Our results imply that corruption control not only enhances firm efficiency directly by reducing unnecessary regulatory burdens, costs, and delays, but it also offsets potential inefficiencies that arise from increased financial development.

Suggested Citation

  • Rouven E. Haschka & Helmut Herwartz & Clara Silva Coelho & Yabibal M. Walle, 2023. "The impact of local financial development and corruption control on firm efficiency in Vietnam: evidence from a geoadditive stochastic frontier analysis," Journal of Productivity Analysis, Springer, vol. 60(2), pages 203-226, October.
    • Handle: RePEc:kap:jproda:v:60:y:2023:i:2:d:10.1007_s11123-023-00694-z
    DOI: 10.1007/s11123-023-00694-z
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    Cited by:

    1. Rouven E. Haschka, 2024. "Endogeneity in stochastic frontier models with 'wrong' skewness: copula approach without external instruments," Statistical Methods & Applications, Springer;Società Italiana di Statistica, vol. 33(3), pages 807-826, July.
    2. Alexander Mayer & Dominik Wied, 2024. "Endogeneity Corrections in Binary Outcome Models with Nonlinear Transformations: Identification and Inference," Papers 2408.06977, arXiv.org, revised Nov 2024.

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    More about this item

    Keywords

    Geoadditve Bayesian stochastic frontier analysis; Financial development; Corruption control; Firm efficiency; Vietnam;
    All these keywords.

    JEL classification:

    • C11 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Bayesian Analysis: General
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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