Abstract
Over the past decade, the Vietnamese capital market has undergone a remarkable transformation, with a significant focus on its stock market that has displayed substantial expansion since 2012. This research delves into the impact of this market progression on the choices pertaining to capital structure made by companies listed in Vietnam. By analyzing a range of trade-off and pecking order models and amalgamating them into a unified regression framework, we gauge their capacity to elucidate these decisions. Our study outcomes unveil that the trade-off theory offers a more robust rationale for the capital structure determinations of Vietnamese companies, particularly during the post-2012 period. Furthermore, we observe a notable increase in the pace of leverage adjustments made by Vietnamese companies post-2012. Subsequent analysis indicates that this acceleration is primarily driven by overleveraged firms, as opposed to underleveraged ones. This study contributes valuable insights into the relationship between capital market development and capital structure choices within the Vietnamese context. It offers important implications for policymakers, investors, and corporate decision-makers seeking to better understand and navigate the evolving dynamics of the Vietnamese capital market.
Recommended Citation
Dai, Y., Guo, L., Guo, C., & Zhang, H. (2023). Reassessing Theories Of Capital Structure: Empirical Insights From Companies Listed In Vietnam. Journal of Corporate Accounting and Finance Wiley.
The definitive version is available at https://doi.org/10.1002/jcaf.22678
Department(s)
Business and Information Technology
Publication Status
Full Access
Keywords and Phrases
capital structure decisions; dynamic target leverage adjustment models; pecking order theory; trade-off theory
International Standard Serial Number (ISSN)
1097-0053; 1044-8136
Document Type
Article - Journal
Document Version
Citation
File Type
text
Language(s)
English
Rights
© 2023 Wiley, All rights reserved.
Publication Date
01 Jan 2023
