Does technological inclusion reduce financial constraints on small and medium sized enterprises? The case of Vietnam

Tuyen Quang Bui and Anh Vu Phuong Do

Finance Research Letters, 2022, vol. 47, issue PA

Abstract: This study investigates whether the use of information technology capabilities reduces financial constraints on SMEs. Using the instrumental variable technique with a Vietnamese panel dataset, the estimates provide evidence that the utilization of technology facilitates loan applications and increases approval rates. In addition, while taking advantage of technology does not help extend loan terms, it does increase the amount of formal loans. Further analysis reveals several potential channels of transmission. First, technology use promotes e-business, and improves firm productivity. Also, although the adoption of technology does not immediately improve the transparency of the business environment, it does promote innovative activities.

Keywords: Technological inclusion; SMEs; Financial constraints; Labour productivity; E-business (search for similar items in EconPapers)
JEL-codes: G21 G28 G32 O17 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:47:y:2022:i:pa:s1544612321004979

DOI: 10.1016/j.frl.2021.102534

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