Nguyen Hoai Diem Lam

Type of the article: Research Article

Abstract
The growing financialization of non-financial firms has raised concerns about resource allocation and the effectiveness of monetary policy, particularly in emerging economies where financial markets remain bank-oriented. This study analyzes the impact of monetary policy on the financial investment behavior of listed non-financial firms in Vietnam, with a specific focus on the moderating role of state ownership. Using an unbalanced panel of 545 firms observed over the period 2007–2024, the generalized method of moments is employed to address endogeneity and dynamic adjustment in firms’ investment decisions. Monetary policy is proxied by key interest rate measures, while state ownership is captured using both continuous ownership ratios and a dummy variable for controlling state ownership. The empirical results show that a one percentage point reduction in interest rates increases financial investment by about 0.08–0.10 percentage points. However, this effect diminishes as state ownership rises and becomes insignificant at moderate ownership levels. For firms with controlling state ownership, monetary easing exerts a negative effect on financial investment, indicating a reversal in the transmission mechanism. These findings point to a structural divergence in financial behavior across ownership types and highlight the importance of ownership structure in shaping firms’ responses to monetary policy. From a policy perspective, the results underscore the need to consider heterogeneity in ownership when evaluating monetary policy effectiveness and to closely monitor corporate financialization, which may crowd out productive investment.

Acknowledgment
This study is part of Nguyen Hoai Diem Lam’s doctoral dissertation at Ho Chi Minh University of Banking, carried out under the academic supervision of Van Dan Dang and Hoang Chung Nguyen.