Analyses of topical policy issues

Gender discrimination, social networks and access to informal finance of Vietnamese small and medium enterprises

Thang Ngoc Bach^a, Thanh Le^b, Thang Xuan Nguyen^a,*, Khanh Hoang^c

a National Economics University, Vietnam

b University of Wollongong, Australia

c University of Economics, Ho Chi Minh City (UEH), Viet Nam

A R T I C L E I N F O

Article history:

Received 18 June 2022

Received in revised form 16 March 2023

Accepted 19 March 2023

Available online 22 March 2023

https://doi.org/10.1016/j.eap.2023.03.017

© 2023 Economic Society of Australia, Queensland. Published by Elsevier B.V. All rights reserved.

A B S T R A C T

The issue of gender discrimination in the informal credit market is under-investigated

given that existing studies largely consider formal bank loans. Using a rich dataset on

access to informal loans and loan terms of Vietnamese privately-owned manufacturing

small and medium enterprises over 2005-2015, this paper finds that female-run firms have a lower propensity to borrow and incur a higher cost of borrowing from informal sources than male-run counterparts. The empirical evidence on gender discrimination is robust to the control of different firm characteristics, firm-specific unobserved het-erogeneity, and selection bias. With the potential to mitigate gender discrimination, extended social networks are found to work in favor of female-run firms.

© 2023 Economic Society of Australia, Queensland. Published by Elsevier B.V. All rights reserved

Keywords

Gender discrimination Social networks Financial accessibility Cost of funding SMEs.