THE IMPACT OF CAPITAL STRUCTURE ON THE ENTERPRISE VALUE: APPROACHING BY THRESHOLD REGRESSION

Dang Ngoc Hung

No rf2mc, OSF Preprints from Center for Open Science

Abstract: The paper examined the impact of capital structure (CP) on the firm value in Vietnam. The study applies the threshold regression model of Hansen (1999, 2000). We considered if there existed a threshold of CP and how CP affected the firm value at each threshold. Research data included 440 listed enterprises on the Vietnam stock market from 2011 to 2020. The findings have found that CP was inversely related to the firm value, which was determined at three different thresholds. In addition, the size of the business had a positive relationship with firm value and the growth rate of revenue had a reverse relationship at a low level to firm value. However, when testing with short-term liabilities and debt ratios, there is no threshold. This study comprehensively examined CP’s impact on the value of non-financial enterprises and for each particular industry. This study was conducted in listed companies on the Vietnam stock market — an emerging economy that demonstrated the reverse impact of CP on firm value.

Date: 2022-06-29
New Economics Papers: this item is included in nep-cfn and nep-sea
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Persistent link: https://EconPapers.repec.org/RePEc:osf:osfxxx:rf2mc

DOI: 10.31219/osf.io/rf2mc

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