Bank concentration, debt maturity, and borrowing costs: Evidence from Vietnam

Type of the article: Research Article

Abstract
In bank-dependent economies, the structure and cost of corporate debt are crucial determinants of financial sustainability and investment decisions. Vietnam, with its underdeveloped capital market and dominance of bank lending, presents an ideal context to examine how banking market structure influences corporate financing. This paper explores the critical role of bank concentration in shaping the maturity structure and cost of debt among 520 listed Vietnamese firms during 2010–2024. The study utilizes financial data from FiinPro, including firm-level, bank-level, and macroeconomic indicators. A dynamic panel data model is estimated using the two-step system generalized method of moments (GMM) approach to address endogeneity concerns and ensure the robustness of results. The results highlight the pivotal role of bank concentration in shaping both the maturity structure and cost of corporate debt. The empirical findings reveal that higher bank concentration significantly increases the proportion of long-term debt. At the same time, firms reduce their reliance on short-term financing, indicating a shift toward more stable financial structures. Moreover, firms operating in more concentrated banking environments benefit from lower borrowing costs.

Acknowledgment
This research forms a component of Thi Hong Nhung Nguyen’s doctoral dissertation at Ho Chi Minh University of Banking, conducted under the supervision of Van Dan Dang.