Interfirm Relationships and Informal Credit in Vietnam *

  title={Interfirm Relationships and Informal Credit in Vietnam *},
  author={Christopher Woodruff},
Trading relations in Vietnam’s emerging private sector are shaped by two market frictions: the difficulty of locating trading partners and the absence of legal enforcement of contracts. Examining relational contracting, we Žnd that a Žrm trusts its customer enough to offer credit when the customer Žnds it hard to locate an alternative supplier. A longer duration of trading relationship is associated with larger credit, as is prior information gathering. Customers identiŽed through business… CONTINUE READING
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