Financial development and firm growth: the role of proactivity of provincial leadership

The Nguyen Huynh

Post-Communist Economies, 2025, vol. 37, issue 6, 571-589

Abstract: This study analyzes financial development and firm growth: the role of proactivity of provincial leadership. The model employed in the paper is the Spatial Durbin Model for testing hypotheses from the Vietnamese Enterprise Survey in the period 2005 – 2018, annually conducted by the General Statistics Office of Vietnam. The results show a spatial interaction for firm growth across localities and that financial development has no significant effect on firm growth in provinces. However, the proactivity of provincial leadership in regulating financial development in a province is crucial to firm growth in that province and neighbouring provinces. Furthermore, business support services to access finance in a province have a positive role in promoting firm growth in that province and the region as a whole province. It has contributed to redefining how enabling financial development drives firm growth in emerging markets like Vietnam.

Date: 2025
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DOI: 10.1080/14631377.2025.2518349

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