Title: Reciprocity between financial leverage and productivity of cooperative credit institutions: evidence from Vietnam

Authors: Van Duong Ha

Addresses: Postgraduate Training Institute, Hong Bang International University, Research and Development Center, Safa Corp, No. 78/35 Ba Van, Ward 14, Tan Binh District, Ho Chi Minh City, Vietnam

Abstract: Cooperative credit institutions (CCIs) are increasingly accessing financial resources to finance the lending operations and improve their productivity. This study's purpose is to discover the factors' impact on the financial leverage and productivity of CCIs in Vietnam. After regression analysis on a set of panel data from 2013 to 2018 of 32 selected CCIs in Vietnam, it appeared that the depth of outreach, productivity and return on equity had positive relationships with financial leverage, while the age of CCIs, credit size, equity growth ratio and return on assets had negative relationships with financial leverage. The deposit, equity growth rate, financial leverage and return on assets had positive relationships with productivity. The depth of outreach, loan-to-deposit ratio, return on equity and non-performing loan ratio had negative relationships with productivity. The study found the interactive relationship between financial leverage and productivity. This study helps managers understand the key determinants for better management of CCIs.

Keywords: cooperative credit institutions; CCIs; credit size; deposit; financial leverage; non-performing loan; productivity; return on assets; return on equity; Vietnam.

DOI: 10.1504/IJEPEE.2023.128393

International Journal of Economic Policy in Emerging Economies, 2023 Vol.17 No.1, pp.64 - 87

Received: 30 Nov 2019
Accepted: 22 Jul 2020

Published online: 19 Jan 2023 *

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