Abstract
AbstractUsing Bayesian approach, this research aims to analyze the impact of financial institutions development on corporate capital structure in 5 developing countries in ASEAN region from 2010 to 2019. We find that financial institutions development and profitability have a negative impact on firms ‘capital structure (including total debt, long-term debt and short-term debt), while inflation positively affects capital structure. National institutional quality and GDP per capita growth rate can have a bidirectional effect on capital structure. Firm size and asset properties have a positive impact on total debt and long-term debt, but negative impact on short-term debt. Meanwhile, TOBINQ has a positive impact on long-term debt, but bidirectional effect on total debt and short-term debt. Our research findings on the capital structure of firms in the five ASEAN developing countries supports both the trade-off theory and the pecking order theory.KeywordsCapital structureASEANFinancial institutions developmentJEL Classification CodeC12C13E44F15
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