The impacts of financial development on economic activities in Vietnam.

Abstract

This thesis examines the impacts of financial development on economic activities in Vietnam at both the macro and the micro level in three core chapters. The first core chapter examines the role of financial development in growth and sources of growth in Vietnam by using the provincial panel data. It shows that financial development has a positive influence on the efficiency of using savings, on the quantity and quality of investment, on productivity, and hence growth. It also finds that there is an indirect impact of financial development on growth mainly through increasing the quality of foreign direct investment rather than the quantity. The following chapter analyses the determinants of household financial development and its role in economic activities of Vietnamese households by using the Household Data Survey. It suggests that the social relationship, location, fixed assets, household size, education, age and Kinh group are the key determinants of household financial development. Moreover, financial development contributes to household income through improving the level of savings and investment, labour productivity and reducing the problem of asymmetric information. Financial development is positively related to household welfare. The final core chapter looks at the impacts of financial development on firm performance in Vietnam by using the Firm Data Survey. It suggests that around 80.7% of Vietnamese firms lie between 0% and 20% in the efficiency scores derived from the DEA technique for 1,886 firms. Financial development plays a key role in firm performance. Smaller firms benefit more from the higher level of financial development.