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

Abstract

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.