How Vietnamese Export Firms Faced Financial Distress during COVID-19? A Bayesian Small Sample Analysis

Thanh Dan Bui and Nguyen Ngoc Thach ()
Additional contact information
Thanh Dan Bui: Finance Faculty, Ho Chi Minh University of Banking, Ho Chi Minh City 70000, Vietnam
Nguyen Ngoc Thach: Asian Journal of Economics and Banking, Ho Chi Minh University of Banking, Ho Chi Minh City 70000, Vietnam

Economies, 2023, vol. 11, issue 2, 1-12

Abstract: A crucial role belongs to export firms in the export-led growth model of Vietnam. The COVID-19 disease has posed a serious challenge to the Vietnamese economy, having negatively impacted its influential export sector. However, investigating this export sector encounters small sample issues within the frequentist framework. So, by adopting a Bayesian approach, this study intends to explore the impact of COVID-19-specific factors on the financial distress of the export companies listed on the Vietnam stock exchange. In case frequentist and Bayesian estimation with non-informative priors cannot acquire statistical efficiency due to problems with insufficient data, thoughtful Bayesian analysis can yield meaningful outcomes. A Bayesian logistic regression model was employed to analyze the scarce data, and the posterior estimates of all the model parameters achieved significantly show that the main operating cash flow ratio to total debt, company size, and retained return on total assets are all negatively related to financial distress. Interestingly, financial leverage positively affects financial distress because a benefit from a tax shield could not compensate for the adverse impact of a debt burden, as suggested in the trade-off theory, which demonstrates the specific financial situation of the companies when the COVID-19 pandemic was in full swing.

Keywords: financial distress; export company; Bayesian estimation; small sample; informative priors; COVID-19 (search for similar items in EconPapers)
JEL-codes: E F I J O Q (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.mdpi.com/2227-7099/11/2/41/pdf (application/pdf)
https://www.mdpi.com/2227-7099/11/2/41/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jecomi:v:11:y:2023:i:2:p:41-:d:1052326

Access Statistics for this article

Economies is currently edited by Ms. Hongyan Zhang

More articles in Economies from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().