The mediating role of corporate borrowings in the nexus between financial inclusion and performance of ICT firms: new insights from Vietnam

Mai Vu, Thuong Tran, Dan Thai, Linh Phuong and Thanh Le

Applied Economics, 2025, vol. 57, issue 30, 4379-4393

Abstract: This paper examines the effect of financial inclusion on firm performance and whether corporate borrowings serve as an effective channel of the impact. In doing so, we use principal component analysis to calculate a financial inclusion index for Vietnam. We then conduct mediation analysis on this index and a large panel of Vietnamese firms in information and communication technology sector from 2008 to 2018. Empirical results indicate a negative influence of financial inclusion on firms’ return on assets. More importantly, corporate borrowings significantly mediate this relationship. In particular, financial inclusion increases corporate borrowings, which then affects return on assets. Although corporate borrowings are positively associated with firm sales, they reduce return on assets and net profit margin of firms. The findings are robust to different estimation methods and inclusion of control variables. They convey important policy implications for governments, academic researchers, and industry practitioners wishing to design programmes and policies to help firms obtain the financial resources necessary for their development.

Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/00036846.2024.2360144 (text/html)
Access to full text is restricted to subscribers.

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:taf:applec:v:57:y:2025:i:30:p:4379-4393

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/RAEC20

DOI: 10.1080/00036846.2024.2360144

Access Statistics for this article

Applied Economics is currently edited by Anita Phillips

More articles in Applied Economics from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().