The heterogeneity in adjustment speeds toward corporate target leverage: the case of Vietnam

Thi Hong An Thai and Radu Burlacu ()
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Radu Burlacu: CERAG - Centre d'études et de recherches appliquées à la gestion - UGA - Université Grenoble Alpes

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Abstract: The paper explores the heterogeneity in the adjustment speed toward the optimal capital structure of Vietnamese listed firms on the period from 2005 to 2017. We test the existence of the target leverage and estimate the speed of adjustment by using a partial adjustment model. The study finds that under-leveraged firms move to the target leverage faster than those that are over-leveraged. The speed of off-target firms is higher than that of near-target firms, and firms with financial surplus move more quickly to the optimal level of debt than those with a deficit.

Keywords: heterogeneity; adjustment speed; target leverage; capital structure; partial adjustment model; deficit; Vietnam (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (1)

Published in International Journal of Monetary Economics and Finance, 2021, 14 (2), pp.105-130. ⟨10.1504/IJMEF.2021.114026⟩

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Journal Article: The heterogeneity in adjustment speeds toward corporate target leverage: the case of Vietnam (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-03981369

DOI: 10.1504/IJMEF.2021.114026

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