Adjustment Speed toward Target Leverage Throughout the Vietnamese Corporate Life Cycle: Under-Versus Over-the-Target Firms

Thi Hong An Thai and Radu Burlacu
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Radu Burlacu: University Grenoble Alpes

Journal of Business Cycle Research, 2022, vol. 18, issue 3, No 5, 315-341

Abstract: Abstract This paper aims to provide empirical evidence of adjustment speeds toward an optimal capital structure over the business life cycle in Vietnam. Based on a sample of 838 non-financial Vietnamese firms quoted from 2005 to 2019, the findings show that adjustments toward target leverage levels vary significantly depending on firms’ life cycles. Patterns also vary depending on whether firms are under or above their targets. While a high-low-high pattern is found with under-levered firms, a low-high-low trend is identified for over-levered firms.

Keywords: Life cycle; Speed of adjustment; Deviation; Target leverage; Vietnam (search for similar items in EconPapers)
JEL-codes: D91 D92 G32 (search for similar items in EconPapers)
Date: 2022
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Working Paper: Adjustment Speed toward Target Leverage Throughout the Vietnamese Corporate Life Cycle: Under-Versus Over-the-Target Firms (2022)
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DOI: 10.1007/s41549-022-00069-7

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