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Industry-specific effects of supplier payment strategies on financial performance: Evidence from Vietnam

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  • Pham, Hieu
  • Doan Huynh Thu, Hoai
  • My, Su Ho Thi
  • Chau, Long Nguyen Thi
  • Hoang Bao, Tram Le

Abstract

This study investigates the impact of supplier payment efficiency on firm profitability in Vietnamese non-financial listed firms, emphasizing institutional contingencies such as state ownership, agency costs, and industry heterogeneity under ESG regulations. Using a panel of 570 firms from 2010 to 2024, we apply two-way fixed effects regressions, instrumental variables, Baron-Kenny mediation, and difference-in-differences models. We find that efficient payments positively influence return on assets, with agency costs partially mediating this relationship through reduced monitoring burdens. Furthermore, state ownership moderates positively, amplifying benefits via preferential credit and governance advantages. Industry heterogeneity yields substantially greater gains in supply-sensitive sectors amid import dependencies and disruption risks. Besides, policy effects reveal heterogeneous impacts, such as net-zero commitments boosting profitability in high-impact sectors while ESG disclosure reduces it in high-sustainability firms. Consequently, these findings extend trade-off and institutional theories by highlighting industry heterogeneity as a novel primary driver in an emerging ESG context, thereby offering implications for optimized working capital strategies and sector-specific policies in similar markets.

Suggested Citation

  • Pham, Hieu & Doan Huynh Thu, Hoai & My, Su Ho Thi & Chau, Long Nguyen Thi & Hoang Bao, Tram Le, 2026. "Industry-specific effects of supplier payment strategies on financial performance: Evidence from Vietnam," Finance Research Letters, Elsevier, vol. 88(C).
    • Handle: RePEc:eee:finlet:v:88:y:2026:i:c:s1544612325020975
    DOI: 10.1016/j.frl.2025.108843
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    Keywords

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    JEL classification:

    • G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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