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Firm volatility in Vietnam (2009–2018): Unpacking determinants and the interplay between province-level financial development and corruption control

Author

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  • Struthmann, Philipp
  • Walle, Yabibal M.
  • Herwartz, Helmut

Abstract

Why do some firms experience more volatile growth rates than others? This paper seeks to shed light on this question using a rich data set of almost 92,000 Vietnamese firms for the period 2009–2018. Apart from firm-level characteristics, the paper examines the roles of province-level financial development, corruption control, and their interaction in explaining firm growth volatility. Our results show that there is a robust negative correlation between corruption control and firm-level volatility. Moreover, while local financial development — measured by financial depth — is generally negatively associated with volatility, the correlation between financial outreach and different measures of firm growth volatility varies. Crucially, we find a negative interaction between corruption control and local financial development, suggesting that financial development may exert a more substantial volatility-dampening effect in environments with robust corruption control, and conversely, that the effect of corruption control may be stronger in provinces with advanced level of financial development.

Suggested Citation

  • Struthmann, Philipp & Walle, Yabibal M. & Herwartz, Helmut, 2026. "Firm volatility in Vietnam (2009–2018): Unpacking determinants and the interplay between province-level financial development and corruption control," Structural Change and Economic Dynamics, Elsevier, vol. 80(C), pages 26-40.
    • Handle: RePEc:eee:streco:v:80:y:2026:i:c:p:26-40
    DOI: 10.1016/j.strueco.2026.06.013
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