Ownership Structure and Capital Structure: A Study of Vietnamese Listed Firms

Abstract

This paper examines the relationships between ownership structure and capital structure for non‐financial listed firms in Vietnam during the period 2007–2012. Although different approaches are applied in this research, all results from those models are consistent. The study finds that while foreign ownership has a negative impact on leverage, state ownership has a positive influence. Managerial ownership has a positive relation with debt level, while the effect of large ownership on debt level is not conclusive.

Does foreign ownership impact accounting conservatism adoption in Vietnam

“…In particular, firms with foreign ownership tend to hold more cash. Le et al (2016) find that foreign ownership has a negative impact on leverage. Further, foreign ownership helps to reduce risk-taking activities of a firm (Vo, 2016).…”

Does state ownership really matter for capital structure in selected G-20 economies?

“…The study was followed by a stream of literature presenting how a firm can benefit from state ownership. 1 These benefits include easy access of politically connected and state-run enterprises to debt financing (Dinc, 2004;Johnson & Mitton, 2003;Khwaja & Mian, 2005;Le & Tannous, 2016), government contracts (Goldman, Rochall, & So, 2010) and government aid (Faccio, Masulis, & McConnel, 2006). This study extends the existing literature by estimating and comparing the effects of state ownership on the capital structure decisions of firms in selected G-20 economies with respect to their level of economic development measured in terms of per capita income (PCI).…”

The Simultaneous Effect of Corporate Ownership on Dividends and Capital Structure: Malaysian Evidence

“…Such financial privileges suggest a positive relationship between government ownership and firms' financial leverage. The financial privileges of government-controlled firms have been supported empirically (Chen et al, 2014;Le & Tannous, 2016;Li et al, 2009;Pöyry & Maury, 2010).…”

“…Furthermore, different identities of block-shareholders (family, government, and foreign ownership) may show different preferences toward capital structure and dividend policy. Even though the literature review provides a number of studies that examined the effect of types and identities of ownership on dividend and capital structure decisions, the reported findings are inconsistent and separately addressed (Al-Najjar & Kilincarslan, 2016;Anderson & Reeb, 2003;Croci, Doukas, & Gonenc, 2011;Djebali, 2015;Le & Tannous, 2016;Pindado, Requejo, & Torre, 2012). Since these two choices have to be simultaneously addressed, statistically, previous studies are more likely to produce biased results because of the endogeneity problem when interdependent factors are segmented (Wooldridge, 2010).…”