Determinants of financing pattern and access to formal - informal credit: The case of small and medium sized enterprises in Vietnam

Nguyen Nhung1,, Luu Nhung2
1 Lincoln University, Christchurch, New Zealand
2 Minho University, Braga, Portugal.

Main Article Content

Abstract

We investigate factors from firm side that determine their financing pattern for new investment
projects and their decision to choose formal, informal credit, or both. For financing pattern of new
investment project, we use Random-effect model while Unordered-Multinomial Logistic is used to
estimate probability of choosing any of four choices to access to finance, say, formal credit, informal
credit, both of them, or none of them. Our analysis is based on a panel of around 2200 small and
medium sized enterprises with 7900 observations extracted from the “Survey of small and medium
scale manufacturing enterprises in Vietnam” in 2005, 2007, and 2009.

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