Chapter 15 The determinants of capital structure: Evidence from Vietnam

Abstract

This study examines financing decisions by Vietnamese firms and compares the results with the findings observed in economies characterized by market mechanisms and property rights. It uses data from Vietnamese enterprises census 2002–2003. Similar to findings in other countries, financial leverage of Vietnamese firms increases with firm size and managerial ownership and decreases with profitability, and with non-debt tax shield. It is also correlated with industry characteristics. Financial leverage was negatively correlated with fixed assets and positively correlated with growth opportunities, contrary to the findings in other countries. Corporate income tax has a negative, albeit small effect on financial leverage.

Citation

Biger, N., Nguyen, N.V. and Hoang, Q.X. (2007), "Chapter 15 The determinants of capital structure: Evidence from Vietnam", Kim, S.-J. and Mckenzie, M.D. (Ed.) Asia-Pacific Financial Markets: Integration, Innovation and Challenges (International Finance Review, Vol. 8), Emerald Group Publishing Limited, Leeds, pp. 307-326. https://doi.org/10.1016/S1569-3767(07)00015-5