Acta Univ. Agric. Silvic. Mendelianae Brun. 2019, 67, 1587-1595
Published online 2019-12-22

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

Phuong Dung Thi Nguyen1, Thanh Nhan Thi Do2, Michael Joseph Dempsey2

1Foreign Trade University, 15 - D5 street, ward 25, Binh Thanh District, Ho Chi Minh City Campus, Vietnam
2Faculty of Finance and Banking, Ton Duc Thang University, 19 Str., Tan Phong ward, District 7, Ho Chi Minh City, Vietnam

Received June 27, 2019
Accepted November 5, 2019

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.


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