The Impact of Bank-Firm Relationships on Corporate Credit Risk in Vietnam

Abstract

In Vietnam’s bank-centric financial system, bank-firm relationships play a pivotal role in capital accessibility, liquidity maintenance, and corporate financial stability. This paper examines the impact of bank-firm relationships on corporate credit risk in Vietnam using a qualitative approach, incorporating a systematic theoretical framework, literature review, and contextual analysis. The findings reveal a dual nature of bank-firm relationships regarding corporate credit risk. Accordingly, the study asserts that this impact is contingent upon financial information quality, corporate governance capacity, credit concentration, and capital diversification. Finally, the paper offers several implications for enterprises, commercial banks, and regulatory authorities to enhance the positive effects of credit relationships while mitigating the risks of long-term financial dependence.