The impact of private sector credit by banks on economic growth the case of viet nam

MINISTRY OF EDUCATION & TRAINING STATE BANK OF VIET NAM BANKING UNIVERSITY HO CHI MINH CITY TRẦN VÕ TƯỜNG VI THE IMPACT OF PRIVATE SECTOR CREDIT BY BANKS ON ECONOMIC GROWTH: THE CASE OF VIET NAM GRADUATION THESIS MAJOR: FINANCE – BANKING CODE: 7340201 Ho Chi Minh City, 2021 MINISTRY OF EDUCATION & TRAINING STATE BANK OF VIET NAM BANKING UNIVERSITY HO CHI MINH CITY TRẦN VÕ TƯỜNG VI THE IMPACT OF PRIVATE SECTOR CREDIT BY BANKS ON ECONOMIC GROWTH: THE CASE OF VIET NAM GRADUATION THESIS MAJOR: FINANCE – BANKING CODE: 7340201 STUDENT NUMBER: 030805170084 CLASS: HQ5-GE03 SUPERVISOR TRẦN NGUYỄN MINH HẢI, PhD Ho Chi Minh City, 2021 ii ABSTRACT The graduation thesis entitled ―THE IMPACT OF PRIVATE SECTOR CREDIT BY BANKS ON ECONOMIC GROWTH: THE CASE OF VIET NAM‖ will focus on the relationship between domestic credit provided by banks to the private sector and Vietnamese economic growth This relationship was concluded positive nexus by many writers that interested in this topic Therefore, this study re-examines this connection, however, in the case of Viet Nam This paper determines the effect of domestic credit provided by banks to the private sector on the economic growth between 1995 and 2019 in Viet Nam Specifically, this paper is going to collect secondary data from reliable organizations to analyze the effect of domestic credit provided by banks to the private sector on economic development by using three variables, which is popular and suitable with research objectives, as independent variables include domestic credit provided by banks to the private sector (CPS); gross capital formation (INV); lending interest rate (RATE), and the economic growth is represented by gross domestic product (GDP) that based on a synthesized of the variables analyzed in the previous studies This study approaches the Autoregressive Distributed Lag (ARDL) model to determine the longterm as well as the short-term relationship between the domestic credit provided by banks to the private sector and the growth of the Vietnamese economy The findings result show that all independent variables have significance in the economy Particularly, domestic credit provided by banks to the private sector positively impacts the economic enhancement in the long-run period However, it is inverse in the short run Finally, this study also suggests some recommendations to the State Bank of Viet Nam about the effect of factors under this study based on (i) the development orientations; (ii) the theoretical framework; (iii) the empirical result of the impact of the domestic credit provided by banks to the private sector on the growth of Viet Nam economy about each factor included in the domestic credit provided by banks to the private sector, the domestic investment, and the interest rate This study also presents limitations and research direction of the topic iii COMMITMENT The author undertakes an honorable commitment to this graduation thesis, specifically as follows: Full name: Trần Võ Tường Vi, class: HQ5-GE03, student number: 030805170084 I am is currently a full-time university student with a high-quality program at the Banking University of Ho Chi Minh City The graduation thesis was completed under the guidance of Trần Nguyễn Minh Hải, Ph.D Major: Finance – Banking Code: 7340201 This graduation thesis is the author's research, the research results are truthful, in which there are no previously published contents or content made by others except for cited citations in the graduation thesis Ho Chi Minh City, April , 2021 The author‘s signature Trần Võ Tường Vi iv ACKNOWLEDGEMENT The author would also like to express my deep gratitude to the instructors Trần Nguyễn Minh Hải, PhD., and the teachers of the Banking University of Ho Chi Minh City, as well as family has dedicatedly instructed, helped, and created the best conditions for the author to complete this graduation thesis Because of the limited time and knowledge of the senior student, it will have some certain mistakes I look forward to receiving comments and suggestions to improve the graduation thesis v ABBREVIATIONS ADB Asian Development Bank AFDB African Development Bank ARDL Autoregressive Distributed Lag EIB European Investment Bank FAO Food and Agriculture Organization of the United States FTA Free Trade Agreement FTA Free Trade Agreement GCF Green Climate Fund GDP Gross domestic product GEF Global Environment Facility GNI Gross national income GSO General Statistics Office of Vietnam HDI Human Development Index IDB Inter-American Development Bank IMF International Monetary Fund MPI Ministry of Planning and Investment PQLI Physical Quality of Life Index R&D Research and Development SME Small and Medium Enterprise VCCI Vietnam Chamber of Commerce and Industry WTO World Trade Organization vi LIST OF TABLES AND FIGURES LIST OF TABLES Table 1.1 Design of research process Table 2.1 Classification of the Private Sector Table 2.2 Separation of the Private and Public Sectors Conceptually Table 2.3 Domestic credit provided by banks to the private sector from 1989 to 2018 (% of GDP) according to income category .10 Table 2.4 Summary of empirical literature about the relationship between domestic credit provided by banks to the private sector and economic development 17 Table 2.5 Summary of the variables from empirical studies 23 Table 2.6 Summary of hypothesis and expected sign .24 Table 3.1 Data sources 30 Table 4.1 Augmented Dickey Fuller Test 34 Table 4.2 The optimal lag based on AIC 35 Table 4.3 Bound test 35 Table 4.4 Long run coefficient estimation using ARDL model .35 Table 4.5 Short run regression analysis using error correction model (ECM) 36 Table 4.6 The international Free Trade Agreement in Viet Nam .37 Table 4.7 Domestic credit growth in Viet Nam from 2003 to 2010 (%) 42 vii LIST OF FIGURES Figure 2.1 The importance of economic growth 14 Figure 4.1 Number of new business registration in Viet Nam from 2000 to 2019 39 Figure 4.2 Four foundations leading to an innovative economy 40 Figure 4.3 Domestic credit provided by banks to the private sector in Viet Nam and Lower middle - income countries from 1995 to 2019 (% of GDP) 41 Figure 4.4 Channels affecting inflation 41 Figure 4.5 Fixed and Total asset accumulation in Viet Nam from 2000 to 2018 (% of GDP) 43 viii TABLE OF CONTENTS ABSTRACT ii COMMITMENT iii ACKNOWLEDGEMENT iv ABBREVIATIONS .v LIST OF TABLES AND FIGURES vi TABLE OF CONTENTS viii CHAPTER 1: INTRODUCTION 1.1 Reasons for selecting the topic 1.2 Research objectives and questions 1.2.1 Overall research objectives .2 1.2.2 Specific research objectives .3 1.2.3 Research questions 1.3 Research scope and subjects .3 1.3.1 Research subject 1.3.2 Research scope 1.4 Research methodology 1.4.1 The approach methods 1.4.2 Data collection methods .4 1.4.3 Data processing methods 1.5 A framework of the research process 1.6 Contribution of the research 1.6.1 Literature contribution 1.6.2 Practical contribution 1.7 The composition of the study CHAPTER 2: LITERATURE REVIEWS 2.1 The private sector 2.1.1 Definition 2.1.2 The important role of the private sector 2.2 Domestic credit provided by banks to the private sector 10 2.2.1 Definition 10 ix 2.2.2 The important role of domestic credit provided by banks to the private sector 11 2.3 The economic growth 12 2.3.1 Definition 12 2.3.2 The importance of economic growth 13 2.4 The effects of domestic credit provided by banks to the private sector on the economic growth 15 2.5 Theoretical framework and empirical literature 15 2.5.1 Theoretical framework .15 2.5.2 Empirical literature 17 2.6 Regression model recommendation 23 Summary of chapter 24 CHAPTER 3: RESEARCH METHODOLOGY 26 3.1 The approach methods 26 3.2 Data collection methods 29 3.3 Data processing methods .30 3.3.1 Stationary test 31 3.3.2 Cointegration test 31 3.3.3 Autoregressive Distributed Lag model & Error Correction model 32 3.3.4 Autocorrelation test 32 3.3.5 Heteroskedasticity test 32 3.3.6 Specification error model test 33 Summary of chapter 33 CHAPTER 4: RESEARCH RESULTS AND DISCUSSION 34 4.1 Stationary test 34 4.2 Cointegration test 34 4.3 Estimation long run and short run relationship .35 4.4 Research discussions 37 4.4.1 The nexus between Domestic credit provided by banks to the private sector (CPS) and Gross domestic product (GDP) 37 4.4.2 The nexus between Gross capital formation (INV) and Gross domestic product (GDP) 43 67 APPENDIX 2: THE SET OF TIME-SERIES DATA YEAR CPS GDP RATE INV 1995 18.48 9.54 22.40 27.14 1996 18.67 9.34 20.10 28.10 1997 19.85 8.15 14.42 28.30 1998 20.12 5.76 14.40 29.05 1999 28.19 4.77 12.70 27.63 2000 35.26 6.79 10.55 29.61 2001 39.29 6.19 9.42 31.17 2002 43.13 6.32 9.06 33.22 2003 48.37 6.90 9.48 35.44 2004 58.72 7.54 9.72 35.47 2005 60.47 7.55 11.03 33.76 2006 65.36 6.98 11.18 34.54 2007 85.64 7.13 11.18 39.57 2008 82.87 5.66 15.78 36.49 2009 103.32 5.40 10.07 37.16 2010 114.72 6.42 13.14 35.69 2011 101.80 6.24 16.95 29.75 2012 94.83 5.25 13.47 27.24 2013 96.80 5.42 10.37 26.68 2014 100.30 5.98 8.67 26.83 2015 111.93 6.68 7.12 27.68 2016 123.81 6.21 6.96 26.58 2017 130.72 6.81 7.07 26.58 2018 133.14 7.08 7.37 26.53 2019 137.91 7.02 7.71 26.84 68 APPENDIX 3: STEPS OF QUANTITATIVE ANALYSISING tsset year, yearly Step 1: ADF test GDP dfuller gdp, drift regress lag(1) Augmented Dickey-Fuller test for unit root - Z(t) has t-distribution Test Statistic 1% Critical 5% Critical Value 10% Critical Value Value -Z(t) -2.535 -2.821 -1.833 -1.383 -p-value for Z(t) = 0.0160 -D.gdp | Coef Std Err t P>|t| [95% Conf Interval] -+ -gdp | L1 | -.4434395 1749359 -2.53 0.032 -.8391721 -.047707 LD | 0620363 2294263 0.27 0.793 -.456962 5810346 3.144204 1.159356 2.71 0.024 5215573 5.76685 | _cons | - dfuller gdp, trend regress lag(1) Augmented Dickey-Fuller test for unit root Interpolated Dickey-Fuller Test Statistic 1% Critical 5% Critical Value 10% Critical Value Value -Z(t) -2.541 -4.380 -3.600 -3.240 -MacKinnon approximate p-value for Z(t) = 0.3078 -D.gdp | Coef Std Err t P>|t| [95% Conf Interval] -+ -gdp | L1 | -.4808198 1892274 -2.54 0.035 -.917179 -.0444606 LD | 1169895 2509756 0.47 0.654 -.4617612 6957402 _trend | -.012482 018814 -0.66 0.526 -.0558672 0309032 _cons | 3.514155 1.320685 2.66 0.029 4686496 6.559661 69 dfuller gdp, noconstant regress lag(1) Augmented Dickey-Fuller test for unit root Interpolated Dickey-Fuller Test Statistic 1% Critical 5% Critical Value 10% Critical Value Value -Z(t) 1.344 -2.660 -1.950 -1.600 -D.gdp | Coef Std Err t P>|t| [95% Conf Interval] -+ -gdp | L1 | 0288085 0214343 1.34 0.209 -.0189501 0765671 LD | -.0339986 2898905 -0.12 0.909 -.6799148 6119176 -> dfuller d.gdp, drift regress lag(1) Augmented Dickey-Fuller test for unit root - Z(t) has t-distribution Test Statistic 1% Critical 5% Critical Value 10% Critical Value Value -Z(t) -3.374 -2.998 -1.895 -1.415 -p-value for Z(t) = 0.0059 -D2.gdp | Coef Std Err t P>|t| [95% Conf Interval] -+ -gdp | LD | -1.603607 4752848 -3.37 0.012 -2.727477 -.4797374 LD2 | 4782683 3212833 1.49 0.180 -.281446 1.237983 3260045 1820471 1.79 0.116 -.1044685 7564775 | _cons | - dfuller d.gdp, trend regress lag(1) Augmented Dickey-Fuller test for unit root Interpolated Dickey-Fuller Test Statistic 1% Critical Value 5% Critical Value 10% Critical Value -Z(t) -3.092 -4.380 -3.600 -3.240 -MacKinnon approximate p-value for Z(t) = 0.1082 70 -D2.gdp | Coef Std Err t P>|t| [95% Conf Interval] -+ -D.gdp | L1 | -1.629878 5271813 -3.09 0.021 -2.919844 -.3399123 LD | 496045 3563853 1.39 0.213 -.3759985 1.368088 _trend | 0053123 0257611 0.21 0.843 -.0577229 0683475 _cons | 2790857 300266 0.93 0.389 -.4556386 1.01381 - dfuller d.gdp, noconstant regress lag(1) Augmented Dickey-Fuller test for unit root Interpolated Dickey-Fuller Test Statistic 1% Critical 5% Critical Value 10% Critical Value Value -Z(t) -2.555 -2.660 -1.950 -1.600 -D2.gdp | Coef Std Err t P>|t| [95% Conf Interval] -+ -gdp | LD | -1.074194 4203582 -2.56 0.034 -2.043542 -.1048464 LD2 | 2217318 3248302 0.68 0.514 -.527328 9707916 CPS dfuller cps, drift regress lag(1) Augmented Dickey-Fuller test for unit root - Z(t) has t-distribution Test Statistic 1% Critical 5% Critical Value 10% Critical Value Value -Z(t) -0.249 -2.821 -1.833 -1.383 -p-value for Z(t) = 0.4045 -D.cps | Coef Std Err t P>|t| [95% Conf Interval] -+ -cps | L1 | -.0129099 0518452 -0.25 0.809 -.130192 1043722 LD | 1218654 5005306 0.24 0.813 -1.010414 1.254144 7.682286 4.85135 1.58 0.148 -3.292229 18.6568 | _cons | - dfuller cps, trend regress lag(1) Augmented Dickey-Fuller test for unit root 71 Interpolated Dickey-Fuller Test Statistic 1% Critical 5% Critical Value 10% Critical Value Value -Z(t) -1.324 -4.380 -3.600 -3.240 -MacKinnon approximate p-value for Z(t) = 0.8820 -D.cps | Coef Std Err t P>|t| [95% Conf Interval] -+ -cps | L1 | -.5929902 4480237 -1.32 0.222 -1.626135 4401543 LD | 3994957 5271805 0.76 0.470 -.8161847 1.615176 _trend | 3.142042 2.411622 1.30 0.229 -2.419168 8.703251 _cons | 22.03053 11.96343 1.84 0.103 -5.557184 49.61824 - dfuller cps, noconstant regress lag(1) Augmented Dickey-Fuller test for unit root Interpolated Dickey-Fuller Test Statistic 1% Critical 5% Critical Value 10% Critical Value Value -Z(t) 1.303 -2.660 -1.950 -1.600 -D.cps | Coef Std Err t P>|t| [95% Conf Interval] -+ -cps | L1 | 0482893 0370726 1.30 0.222 -.0343136 1308922 LD | 398706 5031196 0.79 0.446 -.7223143 1.519726 - dfuller d.cps, drift regress lag(1) Augmented Dickey-Fuller test for unit root - Z(t) has t-distribution Test Statistic 1% Critical 5% Critical Value Value 10% Critical Value -Z(t) -3.387 -2.998 -1.895 -1.415 -p-value for Z(t) = 0.0058 -D2.cps | Coef Std Err t P>|t| [95% Conf Interval] -+ -cps | 72 LD | -1.882592 5557477 -3.39 0.012 -3.196727 -.5684578 LD2 | 9451439 4207704 2.25 0.060 -.0498201 1.940108 13.39633 3.759564 3.56 0.009 4.50637 22.28628 | _cons | - dfuller d.cps, trend regress lag(1) Augmented Dickey-Fuller test for unit root Interpolated Dickey-Fuller Test Statistic 1% Critical 5% Critical Value 10% Critical Value Value -Z(t) -3.151 -4.380 -3.600 -3.240 -MacKinnon approximate p-value for Z(t) = 0.0945 -D2.cps | Coef Std Err t P>|t| [95% Conf Interval] -+ -D.cps | L1 | -2.020993 6412804 -3.15 0.020 -3.59015 -.4518363 LD | 1.033524 4739342 2.18 0.072 -.1261511 2.193199 _trend | 1539786 2884963 0.53 0.613 -.5519465 8599037 _cons | 12.70866 4.171649 3.05 0.023 2.501 22.91632 - dfuller d.cps, noconstant regress lag(1) Augmented Dickey-Fuller test for unit root Interpolated Dickey-Fuller Test Statistic 1% Critical 5% Critical Value 10% Critical Value Value -Z(t) -0.209 -2.660 -1.950 -1.600 -D2.cps | Coef Std Err t P>|t| [95% Conf Interval] -+ -cps | LD | -.0744523 3556078 -0.21 0.839 -.8944854 7455807 LD2 | 0799545 5392174 0.15 0.886 -1.163483 1.323392 RATE dfuller rate, drift regress lag(1) Augmented Dickey-Fuller test for unit root - Z(t) has t-distribution Test Statistic 1% Critical Value 5% Critical Value 10% Critical Value 73 -Z(t) -0.924 -2.821 -1.833 -1.383 -p-value for Z(t) = 0.1897 -D.rate | Coef Std Err t P>|t| [95% Conf Interval] -+ -rate | L1 | -.0962841 1041589 -0.92 0.379 -.3319079 1393398 LD | 5594228 1327639 4.21 0.002 25909 8597557 1.041688 9511215 1.10 0.302 -1.109898 3.193275 | _cons | - dfuller rate, trend regress lag(1) Augmented Dickey-Fuller test for unit root Interpolated Dickey-Fuller Test Statistic 1% Critical 5% Critical Value 10% Critical Value Value -Z(t) -1.924 -4.380 -3.600 -3.240 -MacKinnon approximate p-value for Z(t) = 0.6420 -D.rate | Coef Std Err t P>|t| [95% Conf Interval] -+ -rate | L1 | -.25651 1333065 -1.92 0.091 -.5639152 0508952 LD | 4944956 1264456 3.91 0.004 2029114 7860798 _trend | -.0553303 0324334 -1.71 0.126 -.1301219 0194612 _cons | 3.027617 1.449615 2.09 0.070 -.3152009 6.370435 - dfuller rate, noconstant regress lag(1) Augmented Dickey-Fuller test for unit root Interpolated Dickey-Fuller Test Statistic 1% Critical 5% Critical Value 10% Critical Value Value -Z(t) 0.887 -2.660 -1.950 -1.600 -D.rate | Coef Std Err t P>|t| [95% Conf Interval] -+ -rate | L1 | 0160848 0181355 0.89 0.396 -.0243235 0564931 LD | 5400461 1328859 4.06 0.002 2439579 8361343 74 - dfuller d.rate, drift regress lag(1) Augmented Dickey-Fuller test for unit root - Z(t) has t-distribution Test Statistic 1% Critical 5% Critical Value 10% Critical Value Value -Z(t) -2.584 -2.998 -1.895 -1.415 -p-value for Z(t) = 0.0181 -D2.rate | Coef Std Err t P>|t| [95% Conf Interval] -+ -rate | LD | -.5461367 2113794 -2.58 0.036 -1.04597 -.0463037 LD2 | -.2825754 2451558 -1.15 0.287 -.8622766 2971259 3049702 2124894 1.44 0.194 -.1974874 8074278 | _cons | - dfuller d.rate, trend regress lag(1) Augmented Dickey-Fuller test for unit root Interpolated Dickey-Fuller Test Statistic 1% Critical 5% Critical Value 10% Critical Value Value -Z(t) -2.362 -4.380 -3.600 -3.240 -MacKinnon approximate p-value for Z(t) = 0.3999 -D2.rate | Coef Std Err t P>|t| [95% Conf Interval] -+ -D.rate | L1 | -.5780311 244701 -2.36 0.056 -1.176793 0207305 LD | -.2735503 2635986 -1.04 0.339 -.9185529 3714524 _trend | -.011626 034082 -0.34 0.745 -.0950216 0717695 _cons | 4130296 3899022 1.06 0.330 -.5410266 1.367086 - dfuller d.rate, noconstant regress lag(1) Augmented Dickey-Fuller test for unit root Interpolated Dickey-Fuller Test Statistic 1% Critical Value 5% Critical Value 10% Critical Value 75 -Z(t) -2.487 -2.660 -1.950 -1.600 -D2.rate | Coef Std Err t P>|t| [95% Conf Interval] -+ -rate | LD | -.55904 2247427 -2.49 0.038 -1.077298 -.0407824 LD2 | -.0990386 2225847 -0.44 0.668 -.6123198 4142426 INV dfuller inv, drift regress lag(1) Augmented Dickey-Fuller test for unit root - Z(t) has t-distribution Test Statistic 1% Critical 5% Critical Value 10% Critical Value Value -Z(t) 0.616 -2.821 -1.833 -1.383 -p-value for Z(t) = 0.7233 -D.inv | Coef Std Err t P>|t| [95% Conf Interval] -+ -inv | L1 | 0943159 15318 0.62 0.553 -.2522014 4408333 LD | 2893317 4952934 0.58 0.573 -.8310999 1.409763 -2.252842 4.61938 -0.49 0.637 -12.70261 8.196922 | _cons | - dfuller inv, trend regress lag(1) Augmented Dickey-Fuller test for unit root Interpolated Dickey-Fuller Test Statistic 1% Critical 5% Critical Value 10% Critical Value Value -Z(t) -0.200 -4.380 -3.600 -3.240 -MacKinnon approximate p-value for Z(t) = 0.9915 -D.inv | Coef Std Err t P>|t| [95% Conf Interval] -+ -inv | L1 | -.0659836 3292258 -0.20 0.846 -.8251798 6932125 LD | 1764512 5539323 0.32 0.758 -1.100919 1.453821 _trend | -.1161373 2086971 -0.56 0.593 -.5973936 365119 _cons | 3.875038 12.01537 0.32 0.755 -23.83246 31.58254 76 - dfuller inv, noconstant regress lag(1) Augmented Dickey-Fuller test for unit root Interpolated Dickey-Fuller Test Statistic 1% Critical 5% Critical Value 10% Critical Value Value -Z(t) 1.147 -2.660 -1.950 -1.600 -D.inv | Coef Std Err t P>|t| [95% Conf Interval] -+ -inv | L1 | 0201448 0175696 1.15 0.278 -.0190027 0592923 LD | 3727266 4467738 0.83 0.424 -.6227474 1.368201 - dfuller d.inv, drift regress lag(1) Augmented Dickey-Fuller test for unit root - Z(t) has t-distribution Test Statistic 1% Critical 5% Critical Value 10% Critical Value Value -Z(t) -2.486 -2.998 -1.895 -1.415 -p-value for Z(t) = 0.0209 -D2.inv | Coef Std Err t P>|t| [95% Conf Interval] -+ -inv | LD | -1.307944 526071 -2.49 0.042 -2.551904 -.0639838 LD2 | 9257376 4304012 2.15 0.069 -.0919996 1.943475 7594179 540715 1.40 0.203 -.5191698 2.038006 | _cons | - dfuller d.inv, trend regress lag(1) Augmented Dickey-Fuller test for unit root Interpolated Dickey-Fuller Test Statistic 1% Critical Value 5% Critical Value 10% Critical Value -Z(t) -4.021 -4.380 -3.600 -3.240 -MacKinnon approximate p-value for Z(t) = 0.0082 77 -D2.inv | Coef Std Err t P>|t| [95% Conf Interval] -+ -D.inv | L1 | -1.948858 4846237 -4.02 0.007 -3.134689 -.7630262 LD | 1.294984 3651422 3.55 0.012 4015137 2.188455 _trend | -.185014 0767883 -2.41 0.053 -.3729081 0028801 _cons | 2.8258 953361 2.96 0.025 4930097 5.15859 - dfuller d.inv, noconstant regress lag(1) Augmented Dickey-Fuller test for unit root Interpolated Dickey-Fuller Test 1% Critical Statistic 5% Critical Value 10% Critical Value Value -Z(t) -2.027 -2.660 -1.950 -1.600 -D2.inv | Coef Std Err t P>|t| [95% Conf Interval] -+ -inv | LD | -1.067788 5268785 -2.03 0.077 -2.282772 1471961 LD2 | 8084974 4471571 1.81 0.108 -.2226488 1.839644 Step 2: Optimal Lag Length ardl gdp cps inv rate, maxlags(2) aic ARDL(1,1,1,1) regression F( Log likelihood = 7.2088038 7, 4) = 6.47 Prob > F = 0.0452 R-squared = 0.9188 Adj R-squared = 0.7768 Root MSE = 0.2298 -gdp | Coef Std Err t P>|t| [95% Conf Interval] -+ -gdp | L1 | 1004215 255977 0.39 0.715 -.6102846 8111276 | -.1010675 0360075 L1 | 1391358 0449415 -2.81 0.048 -.2010403 -.0010946 3.10 0.036 0143583 2639134 | 2157671 0863972 2.50 0.067 -.02411 4556441 L1 | 4058298 1190839 3.41 0.027 0752 7364597 | cps | | inv | 78 | rate | | -1.021873 4286897 -2.38 0.076 -2.212106 1683608 L1 | 4972613 2675065 1.86 0.137 -.2454559 1.239978 -10.70523 4.425254 -2.42 0.073 -22.9917 1.581245 | _cons | - matrix list e(lags) e(lags)[1,4] r1 gdp cps inv rate 1 1 Step 3: Bound Test Pesaran/Shin/Smith (2001) ARDL Bounds Test H0: no levels relationship F = 9.218 t = -5.597 Critical Values (0.1-0.01), F-statistic, Case | [I_0] | [I_1] L_1 | [I_0] L_1 | L_05 [I_1] | [I_0] L_05 | [I_1] L_025 | [I_0] L_025 | [I_1] L_01 L_01 + + + + k_3 | 2.72 3.77 | 3.23 4.35 | 3.69 4.89 | 4.29 5.61 accept if F < critical value for I(0) regressors reject if F > critical value for I(1) regressors Critical Values (0.1-0.01), t-statistic, Case | [I_0] | [I_1] L_1 | [I_0] L_1 | L_05 [I_1] | [I_0] L_05 | [I_1] L_025 | [I_0] L_025 | [I_1] L_01 L_01 + + + + k_3 | -2.57 -3.46 | -2.86 -3.78 | -3.13 -4.05 | -3.43 -4.37 accept if t > critical value for I(0) regressors reject if t < critical value for I(1) regressors k: # of non-deterministic regressors in long-run relationship Critical values from Pesaran/Shin/Smith (2001) Step 4: Long run coefficient of ARDL model ardl gdp cps inv rate, lags(1,1,1,1) ec regstore (ecreg) ARDL(1,1,1,1) regression Log likelihood = 4.5496426 R-squared = Adj R-squared = 0.8565 0.7130 Root MSE = 0.2615 -D.gdp | Coef Std Err t P>|t| [95% Conf Interval] 79 -+ -ADJ | gdp | L1 | -.666671 119115 -5.60 0.001 -.9483332 -.3850088 -+ -LR | cps | 0287654 0101215 2.84 0.025 0048318 052699 inv | 5522994 1560933 3.54 0.009 1831973 9214015 rate | -.5947108 1552046 -3.83 0.006 -.9617112 -.2277103 -+ Step 5: Short run estimation using ECM model regress Source | SS df MS -+ F(7, 7) = 5.97 Model | 2.8576731 408239015 Prob > F = 0.0155 Residual | 478812654 068401808 R-squared = 0.8565 -+ -Total | 3.33648576 14 238320411 Adj R-squared = 0.7130 Root MSE = 26154 -D.gdp | Coef Std Err t P>|t| [95% Conf Interval] -+ -gdp | L1 | -.666671 119115 -5.60 0.001 -.9483332 -.3850088 0191771 0062779 3.05 0.018 0043323 0340219 | cps | inv | 368202 1027827 3.58 0.009 1251594 6112445 rate | -.3964764 1105359 -3.59 0.009 -.6578522 -.1351007 -.0784047 0306057 -2.56 0.037 -.1507756 -.0060338 -.2120685 0875474 -2.42 0.046 -.4190853 -.0050518 -.1994791 1283944 -1.55 0.164 -.5030835 1041253 -4.333801 2.636527 -1.64 0.144 -10.5682 1.900596 | cps | D1 | | inv | D1 | | rate | D1 | | _cons | Step Autocorrelation Test estat dwatson Durbin-Watson d-statistic( 8, 15) = 2.74754 estat durbinalt Durbin's alternative test for autocorrelation 80 lags(p) | chi2 df Prob > chi2 -+ | 2.032 0.1540 H0: no serial correlation Step Heteroskedasticity Test estat imtest, white White's test for Ho: homoskedasticity against Ha: unrestricted heteroskedasticity chi2(14) = 15.00 Prob > chi2 = 0.3782 Cameron & Trivedi's decomposition of IM-test Source | chi2 df p -+ Heteroskedasticity | 15.00 14 0.3782 Skewness | 12.01 0.1004 Kurtosis | 0.09 0.7705 -+ Total | 27.09 22 0.2078 estat hettest Breusch-Pagan / Cook-Weisberg test for heteroskedasticity Ho: Constant variance Variables: fitted values of D.gdp chi2(1) = 0.76 Prob > chi2 = 0.3847 Step Ramsey test ovtest Ramsey RESET test using powers of the fitted values of D.gdp Ho: model has no omitted variables F(3, 4) = Prob > F = 0.88 0.5231 81 APPENDIX 4: THE MONETARY POLICY AND INFLATION RATE IN VIET NAM IN THE PERIOD FROM 2000 TO 2012 Figure The money supply and interest rate in the easy and tight monetary policy in Viet Nam between 2000 and 2012 Source: Ha Thi Thieu Dao & Pham Thi Tuyet Trinh (2013) Figure VNIndex; Real estate prices; Inflation rate in Viet Nam from 2000 to 2012 Source: Ha Thi Thieu Dao & Pham Thi Tuyet Trinh (2013) ... ? ?THE IMPACT OF PRIVATE SECTOR CREDIT BY BANKS ON ECONOMIC GROWTH: THE CASE OF VIET NAM? ?? will focus on the relationship between domestic credit provided by banks to the private sector and Vietnamese... by banks to the private sector on the growth of the economy, including in the concept of the private sector, domestic credit provided by banks to the private sector, economic growth 2.1 The private. .. provided by banks to the private sector on the economic growth in the case of Viet Nam from the equation (2.1): = (3.1) Where: : the variable proxy for the economic growth at the time t (USD); : the