THE IMPACT OF BANK CREDIT AND LENDING RATE ON THE FINANCIAL DEVELOPMENT OF THE LOGISTICS INDUSTRY IN VIETNAM

Abstract

Recent studies and policymakers have focused on debt financing as a crucial element of financial development. Thus, the present study investigates the effect of bank credit and lending rates on Vietnam's logistics industry's financial growth. This study also included business size and sales growth as control variables. This study compiles information  from the thirty-five largest trade logistic companies listed on the Ho Chi Minh Stock Exchange and the Hanoi Stock Exchange. This analysis compiles information from 2016 to 2020 from both stock exchanges' official financial accounts and databases. This study included panel data analysis approaches, including the fixed effect model (FEM) and robust standard error. Results reveal that bank credit, sales growth, and business size positively correlate with financial development. However, the loan rate negatively affects financial development in Vietnam's logistics industry. These conclusions have given regulators suggestions for creating policies regarding debt financing and financial growth.