Firm - specific determinants of capital structure: Evidence from Vietnam during the period of 2007 - 2011
Main Article Content
Abstract
We analyse the relationship between four key firm- specific indicators of capital structure of 85
Vietnamese non- financial listed firms during the period from 2007 to 2011, and the extent to which
the Financial Crisis between 2008 and 2009 affects them. The regression results of OLS estimation
point out that the level of long- term debt and total debt increase as Vietnamese firms have higher
growth opportunities, larger size as well as more tangibility. In contrast, companies which gain more
profits are likely to use their retained earnings to fund their operation activities, rather than issuing
more debt. These findings are generally consistent with most of previous literature. When dummy
variable is added into our model to examine the effect of Financial Crisis, we see that the relationship
between determinants and the leverage of Vietnamese firms unchanged, except for the case that
companies with higher market-to-book value tend to reduce their long- term debt from 2008 to 2009.
Article Details
Keywords
capital structure, leverage, trade - off theory, pecking order theory
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