Political connection and access to capital market: A study of Vietnamese listed firms

Abstract

The study discusses how political connections play a critical role in facilitating firms' access to the loan capital market. The authors demonstrate via the results of tabular data regression that organizations with institutional affiliations have less trouble getting financing in the market. We show empirical evidence of political links with their involvement in boosting enterprises' access to capital, particularly from state commercial banks, by using a dataset of listed joint-stock companies on HOSE between 2009 and 2020 using the panel regression approach. This conclusion also supports the hypothesis that political ties do confer some advantages on enterprises, assist in removing legal limits and/or obstacles, and alleviate the issue of information asymmetry, hence improving their ability to access the capital market.