Financing Constraints and Corporate Resilience: Evidence from Two Shocks in Vietnam
Thị Xuan My Duong
Vietnam National University
This study examines whether pre-shock financing constraints predict operating resilience among Vietnamese listed non-financial firms. Resilience is separated into operating resistance, measured by shock-quarter operating performance conditional on a firm-specific benchmark, and recovery, defined as the first subsequent return to that benchmark. The analysis covers Vietnam's 2021Q3 COVID-19 lockdown and the financial disruption concentrated in 2022Q4. The resistance samples contain 512 and 537 firms, respectively. Resistance is estimated using baseline-adjusted analysis-of-covariance models, while recovery is analyzed with discrete-time complementary log-log hazard models. The Whited-Wu index is the principal financing-constraint proxy, and the Hadlock-Pierce SA index provides a robustness measure. Across both shocks, the preferred models provide no statistically significant evidence that greater pre-shock constraints systematically predict weaker resistance or slower severity-adjusted recovery. Pooled interactions likewise do not establish cross-shock differences. A positive association between SA and post-2022 recovery persists under an alternative threshold set 10% of the benchmark's absolute value below the benchmark and under a binary-SA specification, but WW does not reproduce it; the result is therefore robust to these alternative specifications but remains proxy-sensitive. Initial loss severity consistently predicts a lower recovery hazard, although it also measures the distance to the recovery threshold. Conventional constraint indices consequently provide limited and unstable information about realized operating resilience in this setting.
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