The Impact of Monetary Policy on the Transition to a Circular Economy: The Mediating Role of Commercial Banks and Non-Bank Credit Institutions

This study aims to determine the structure and measure the level of monetary policy impact on the transition to a circular economy in Vietnam. Primary data is synthesized from a survey of 321 experts with knowledge and experience in the fields of economics, finance, and banking. Partial Least Square...

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Bibliographic Details
Main Authors: Ngoc Hoang Tien, Nguyen-Quynh-Nhu Ngo, Uyen-Nhi Do, Minh-Thao Truong
Format: Article
Language:English
Published: SAGE Publishing 2025-05-01
Series:SAGE Open
Online Access:https://doi.org/10.1177/21582440251335434
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Summary:This study aims to determine the structure and measure the level of monetary policy impact on the transition to a circular economy in Vietnam. Primary data is synthesized from a survey of 321 experts with knowledge and experience in the fields of economics, finance, and banking. Partial Least Squares—Structural Equation Modeling (PLS-SEM) is used to identify the structure and level of impact of monetary policies on financial intermediaries and the circular economy in Vietnam. Research results have determined the structure and level of monetary policies impact on Vietnam’s transition to the circular economy. First, commercial banks and non-bank credit institutions were treated as moderators of the impact of the central bank’s monetary policy on the players of the transition to the circular economy. Second, our study fills in this research gap by examining the impact of monetary policy on the transition to a circular economy in Vietnam in three scenarios expansionary monetary policy, contractionary monetary policy, and stable monetary policy. Third, our research has broadened and advanced our understanding of the role of commercial banks and non-bank credit institutions in the various mechanisms, that monetary policy can influence in the transition to a circular economy in Vietnam. These findings are the premise for the Government and the State Bank of Vietnam to consider to promulgate monetary policies to foster the Vietnam’s transition to a circular economy.
ISSN:2158-2440