The Determinants of Capital Structure: New Evidence from Listed Companies in Vietnam

Phuong Dung Thi Nguyen, Thanh Nhan Thi Do and Michael Joseph Dempsey
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Phuong Dung Thi Nguyen: Foreign Trade University, 15 - D5 street, ward 25, Binh Thanh District, Ho Chi Minh City Campus, Vietnam
Thanh Nhan Thi Do: Faculty of Finance and Banking, Ton Duc Thang University, 19 Str., Tan Phong ward, District 7, Ho Chi Minh City, Vietnam
Michael Joseph Dempsey: Faculty of Finance and Banking, Ton Duc Thang University, 19 Str., Tan Phong ward, District 7, Ho Chi Minh City, Vietnam

Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, 2019, vol. 67, issue 6, 1587-1595

Abstract: This study examines the factors which affect the capital structure of 608 non-financial firms in Vietnam during the period 2009-2017. Our findings indicate that companies with more tangible assets prefer longer term to shorter term debts while larger companies tend to borrow more to finance their activities. Furthermore, companies with high profit and high growth in Vietnam are able to opt for alternative options for raising capital in addition to borrowing. Overall, we recommend that capital structures in Vietnamese firms can be understood within a framework of the pecking order theory. Interestingly, audit reputation is the single considered determinant that does not appear to impact on the firms' capital structure.

Keywords: capital structure; leverage; firm size; liquidity; audit reputation (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:mup:actaun:actaun_2019067061587

DOI: 10.11118/actaun201967061587

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