Determinants of capital structure of Vietnamese-listed enterprises

Abstract

This research aims to investigate and point out major determinants of capital structure of listed enterprises, and thereafter, prescript recommendations on how business executives can maintain a healthy capital structure. The research team has studied several research models and estimation methodologies including Pool OLS, FEM, REM and FGLS with regards to tabular data as well as inspection data in order to devise the model used in this research. After analyzing descriptive statistics of macro and micro factors that influence an enterprise capital structure, the research goes on to apply a regression model to pinpoint the micro determinants of an enterprise capital structure. The Regression Model is conducted based on FGLS method in order to ensure model stability, consistency, and effectiveness. On one hand, the research results reveal a negative impact of profitability, ratio between fixed asset and total asset as well as years of operation on the capital structure. On the other hand, an enterprise-scale and growth rate have a positive impact on its capital structure. Contrary to several research in the past, corporate income tax and business ownership type have no impact on capital structure.