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

Rouven E. Haschka, Helmut Herwartz, Clara Silva Coelho () and Yabibal Walle
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Rouven E. Haschka: University of Cologne
Helmut Herwartz: University of Göttingen
Clara Silva Coelho: University of Hamburg

Journal of Productivity Analysis, 2023, vol. 60, issue 2, No 7, 203-226

Abstract: 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.

Keywords: Geoadditve Bayesian stochastic frontier analysis; Financial development; Corruption control; Firm efficiency; Vietnam (search for similar items in EconPapers)
JEL-codes: C11 D22 D73 G21 O43 O47 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (2)

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DOI: 10.1007/s11123-023-00694-z

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