Determinants of capital structure in emerging markets: Evidence from Vietnam

Vo, Xuan Vinh

doi:10.1016/j.ribaf.2016.12.001

Cited by 148 publications

(193 citation statements)

References 74 publications

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“…In the first study, Canh, Liem & Son (2017) pointed out that profitability and size lose their importance as explanatory variables for more indebted companies, and tangibility is seen as a factor that increases the companies' indebtedness level. Vo (2017) found different relations between the variables tested, and short and long-term-debt. Vo (2017) points that characteristics such as tangibility, size and liquidity having a negative relation to short-term debt and a positive one to long-term debts.…”

Section: Empirical Evidence Of Capital Structure Theoriesmentioning

confidence: 74%

“…Vo (2017) found different relations between the variables tested, and short and long-term-debt. Vo (2017) points that characteristics such as tangibility, size and liquidity having a negative relation to short-term debt and a positive one to long-term debts.…”

Section: Empirical Evidence Of Capital Structure Theoriesmentioning

confidence: 74%

“…The results, however, show that neither the pecking order nor the trade-off theory were sufficient to explain the decisions regarding capital structure. Canh, Liem & Son (2017) and Vo (2017) studied the relationship between the characteristics of Vietnamese companies listed in stock markets and their indebtedness level. In the first study, Canh, Liem & Son (2017) pointed out that profitability and size lose their importance as explanatory variables for more indebted companies, and tangibility is seen as a factor that increases the companies' indebtedness level.…”

Section: Empirical Evidence Of Capital Structure Theoriesmentioning

confidence: 99%

See 2 more Smart Citations

Determinants of capital structure of companies that make up the Small Caps index of B3

Carvalho¹,

Ribeiro²,

Amaral³

2019

CGG

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Objective: The purpose of this study was to analyze the determinants of short-term debt (STD) and long-term debt (LTD) of the companies that make up the B3 SMLL Index in order to identify which theory, trade-off or pecking order better describes the behavior of these companies. Method: Panel data models were used, having as explanatory variables the profitability, risk, size, current liquidity, growth and tangibility of the assets. Relevance: The study stands out by analyzing the adequacy of capital structure theories to the context of smaller capitalization companies listed on the stock exchange of an emerging country. Results: The results showed that the profitability and the current liquidity presented a negative relation with the STD, while the variables size, growth and tangibility presented a positive relation with this variable. In the long run, the variables profitability and tangibility presented a negative relation with the LTD, and the variables risk and size presented a positive relation with this indebtedness measure. Theoretical contributions: The theoretical contribution of the study lies in the fact that, in the short term, pecking order theory was more adequate to describe the choice of indebtedness level, while for long-term indebtedness, there was no predominance of a theory. Contributions to management: In the practical field, the study contributes to point out the relationship between different variables and the decision of indebtedness, which is useful for a more assertive decision-making by investors and managers. RESUMO Objetivo: O estudo objetivou analisar os determinantes do endividamento de curto (ECP) e de longo prazo (ELP) das empresas que compõem o Índice SMLL da B3, a fim de identificar qual teoria, trade-off ou pecking order, melhor descreve o comportamento destas empresas. Método: Foram empregados modelos de dados em painel, tendo como variáveis explicativas a rentabilidade, o risco, o tamanho, a liquidez corrente, o crescimento e a tangibilidade dos ativos. Relevância: O estudo destaca-se por analisar a adequação das teorias sobre estrutura de capital ao contexto de empresas de menor capitalização, listadas em bolsa de valores de um país emergente. Resultados: Nos resultados apontou-se que, a rentabilidade e a liquidez corrente apresentaram uma relação negativa com o ECP, enquanto as variáveis tamanho, crescimento e tangibilidade apresentaram uma relação positiva com esta variável. No longo prazo, as variáveis rentabilidade e tangibilidade apresentaram uma relação negativa com o ELP e, as variáveis risco e tamanho apresentaram uma relação positiva com essa medida de endividamento. Contribuições teóricas: A contribuição teórica do estudo reside no apontamento de que, no curto prazo, a teoria da pecking order mostrouse mais adequada para descrever a escolha do nível de endividamento, enquanto para o endividamento de longo prazo, não houve predomínio de uma teoria. Contribuições para a gestão: No campo prático, o estudo contribui ao apontar a relação entre diferentes variáveis e a d...

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Section: Empirical Evidence Of Capital Structure Theoriesmentioning

confidence: 74%

Section: Empirical Evidence Of Capital Structure Theoriesmentioning

confidence: 74%

Section: Empirical Evidence Of Capital Structure Theoriesmentioning

confidence: 99%

See 1 more Smart Citation

Determinants of capital structure of companies that make up the Small Caps index of B3

Carvalho¹,

Ribeiro²,

Amaral³

2019

CGG

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“…Ambos os modelos econométricos empregam variáveis de controle relacionadas à tangibilidade dos ativos, a oportunidades de crescimento, ao porte e à rentabilidade dos ativos, geralmente empregadas na literatura do gênero conforme aponta Vo (2017).…”

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Determinantes da Estrutura de Capital no Brasil: Evidências Empíricas a partir de Dados em Painel no período entre 2010 e 2016

Filho

Pamplona

Lucas

et al. 2018

Rev. Adm., Soc. Inov.

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RESUMO:Esse estudo analisa os fatores determinantes da estrutura de capital das companhias abertas brasileiras (exceto instituições financeiras e seguradoras) com ações listadas na BM&BOVESPA no período de 2010 a 2016, sob a perspectiva da pecking order theory e da tradeoff theory, empregando metodologia de dados em painel e modelos econométricos com variáveis de controle referentes à tangibilidade dos ativos, ao porte das empresas, a oportunidades de crescimento e à rentabilidade dos ativos. Este artigo preenche lacuna relativa ao reduzido número de estudos correlatos no período objeto da análise e considera base de dados homogênea oriunda das demonstrações financeiras elaboradas de acordo com as normas internacionais de contabilidade a partir de 2010. Possíveis limitações desse artigo advêm do reduzido número de companhias brasileiras com ações listadas em bolsa, assim como o reduzido número de observações comparativamente aos estudos semelhantes, notadamente os focados no mercado de capitais norte-americano. Os resultados obtidos sugerem que as companhias abertas brasileiras se financiam substancialmente por meio da emissão de dívida, corroborando o modelo da pecking order theory. Não foram encontradas evidências robustas que sugiram que empresas sigam o modelo da tradeoff theory. PALAVRAS-CHAVE: Estrutura de capital, Pecking Order Theory, e Tradeoff Theory. Determinants of Capital Structure in Brazil: Empirical Evidence from Panel Data in the period between2010 and 2016 ABSTRACT: This study analyzes the determinants of the capital structure of Brazilian public companies (excluding financial institutions and insurance companies) with shares listed on BM&FBOVESPA between 2010 and 2016, from the perspective of pecking order theory and tradeoff theory, using data methodology in panel and econometric models with control variables related to the tangibility of the assets, the size of the companies, the growth opportunities and the profitability of the assets. This article fills in the gap related to the small number of correlated studies in the period of analysis and considers a homogeneous database derived from financial statements prepared in accordance with international accounting standards as of 2010. Possible limitations of this article come from the small number of Brazilian companies with shares listed on the stock exchange, as well as the small number of observations compared to similar studies, especially those focused on the US capital market. The results obtained suggest that Brazilian public companies are substantially financed through debt issuance, corroborating the pecking order theory model. No robust evidence was found to suggest that firms follow the tradeoff theory model.

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“…A large number of papers have since investigated and clearly revealed the links that help to understand the role of the factors which define a company's debt load, which include profitability, company size, effective tax rate, company growth, asset tangibility, non-debt tax shield, etc. (see for example [2] and [3]). Nevertheless, the non-specific factors that may affect company debts irrespective of any economic and policy uncertainty only came to attention rather recently [4]; [5].…”

Section: Introductionmentioning

confidence: 99%

The Impact of Economic Policy Uncertainty on Capital Structure: Evidence from Russia

Granville¹,

Matoušek²,

Sokolov³

2019

КФ

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This paper is a study of the influence of economic policy uncertainty on the capital structure of companies operating in the Russian market. The sample size is particularly notable (over 16,000 companies and 230,000 observations are included) insofar as previous studies have invariably used smaller selections due to the complexities of data processing. Several hypotheses are proposed and treated which concern the interrelations between company debt policies and the status of individual, sectoral, or industry relevant commercial activity, where the constant threat of economic uncertainty due to political or other external machinations affects the market. This research paper examines the following capital structure determinants: profitability, asset structure, company size, tax shield, non-debt tax shield, growth opportunity, and risk. The following methods are applied to test a series of nine hypotheses proposed as the most salient indicators of the present state of academic consensus: the Pool model (Pool), the fixed effect model (FE), and the random effect model (RE). In this context, the influence of economic uncertainty on the status of different debt types in 16,882 Russian companies between 2000 and 2017 was studied using the economic policy uncertainty index calculated in 2012. The results serve to confirm many of the extant hypotheses in the academic literature in the area of capital structural evaluation. For example, it is immediately apparent that the influence of uncertainty is of less significance for large companies as regards all types of debt (joint, short-term and long-term), due to their greater stability and lower risks for creditors. Among other conclusions, it is confirmed that as long as serious government participation is characteristic of the Russian banking system, the efficacy of the debt financing system is not equal for all sectors, and those sectors which are of strategic importance for the state are particularly resilient in troubled economic periods. However, interestingly, in the case of a short-term debt leverage such influence does not materialise. From a theoretical point of view this paper will be useful for researchers studying the fluctuating market conditions of developing or transitional markets (the large sample size will make this study particularly attractive for further evaluation at all levels of academic analysis). An understanding of the multivariate interrelations described in this paper may also be useful to company managers and investors who will gain insight into the consequences of fluctuations in levels of economic uncertainty for different types of companies.

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Determinants of capital structure in emerging markets: Evidence from Vietnam

Cited by 148 publications

References 74 publications

Determinants of capital structure of companies that make up the Small Caps index of B3

Determinants of capital structure of companies that make up the Small Caps index of B3

Determinantes da Estrutura de Capital no Brasil: Evidências Empíricas a partir de Dados em Painel no período entre 2010 e 2016

The Impact of Economic Policy Uncertainty on Capital Structure: Evidence from Russia

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