Factors Effect on Capital Structure The Caseof Delisted Companies on the Vietnam Stock Market
Main Article Content
Abstract
The intent of this study is to investigate the factors effect on the capital structure of companies delisted on the stock market. In the period from 2012 to 2015, 120 companies delisted on Vietnam’s stock markets (HNX and HOSE). We classified the chosen companies delisted by delisting reason. We then we chose those companies delisted relating to the issue of capital. Based on data from 80 companies delisted on Vietnam stock markets using quantitative research methods, we find a correlation between the debt ratio of the firms and the proxy of firm’s performance, the proxy of firm size, the liquidity ratio and return on assets. The study results have implications for investors and for managers in making decisions about optimal capital structure. The results are a basis for investors to predict the health of the companies in which they intend to invest, or delisted companies that have still the capability of developing.
Keywords:
Capital structure, stock market, delisted firms, Vietnam.
References
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[3] Sunder, L. and S.C. Myers, “Testing Static Tradeoff against Pecking Order Models of Capital Structure”, Journal of Financial Economics, 51 (1999), 219.
[4] Fama EF, French KR. “Testing trade-off and pecking order predictions about dividends and debt”. T. Rev. Financ. Stud., 15 (2002), 1.
[5] Myers, S. C., “Capital structure”, The Journal of Economic Perspectives, 15 (2001) 2, 81.
[6] Chen, Linda H., and George J. Jiang. The determinants of dutch capital structure choice. University of Groningen, 2001.
[7] Deesomsak, R., Paudyal, K., & Pescetto, G.. “The determinants of capital structure: Evidence from the Asia Pacific region”, Journal of Multinational Financial Management, 14 (2004) 4, 387.
[8] Gaud, P., E. Jani, M. Hoesli, and A. Bender., “The Capital Structure of Swiss Companies: An Empirical Analysis Using Dynamic Panel Data,” European Financial Management, 11 (2005), 51.
[9] Modigliani F, Miller MH, “The cost of capital, corporation finance, and the theory of investment”. Am. Econom. Rev., 48 (1958) 3, 261.
[10] Hayne E. Leland, and David H. Pyle. “Informational asymmetries, financial structure, and financial intermediation”, The Journal of Finance 32 (1977) 2, 371-387.
[11] Jensen M, Meckling W., “Theory of the Firm: Managerial Behavior, Agency Costs and Ownership Structure”, J. Financ. Econom., 3 (1976), 305.
[12] Harris, Milton, and Artur Raviv, “Corporate control contests and capital structure”, Journal of financial Economics, 20 (1988), 55.
[13] Tran Dinh Khoi Nguyen, Ramachandran, Neelakantan, “Capital Structure in Small and MediumsizedMedium sized Enterprises: The Case of Vietnam”, ASEAN Economic Bulletin, 23 (2006), 192.
[14] Biger Nahum, Nam V. Nguyen and Quyen X. Hoang, “The determinants of capital structure: evidence from Vietnam”, Asia-Pacific Financial Markets: Integration, Innovation and Challenges International Finance Review, 8 (2008), 307.
[15] Okuda Hidenobu, Lai Thi Phuong Nhung, “The Determinants of the Fundraising Structure of Listed Companies in Vietnam: Estimation of the Effects of Government Ownership”, Global COE Hi-Stat Discussion Paper Series 110 (2010).
[16] Dzung Nguyen, Ivan Diaz-Rainey and Andros Gregoriou, “Financial Development and the Determinants of Capital Structure in Vietnam”, Social Science Research Network, 2012.
[17] Modigliani, F. and Miller, M., “Corporate income taxes and the cost of capital: A correction”, The American Economic Review, 53 (1963), 443.
[18] Bradley M, Jarrelli GA, Kim EH., “On the Existence of an Optimal Capital Structure: theory & evidence”. T. J. Financ., 39 (1984) 3, 857.
[19] Kraus, Alan, and Robert H. Litzenberger, “Skewness preference and the valuation of risk assets”, The Journal of Finance 31 (1976) 4, 1085.
[20] Harris, Milton and Artur Ravrv., “The theory of capital structure”, Journal of Finance, 46 (1991), 297.
[21] Fischer EO, Heinkel R, Zechner J., “Dynamic Capital Structure Choice: Theory and Tests”, J. Financ., 44 (1989), 19.
[22] Booth LV, Aivazian V, Demirguc-Kunt A, Maksimovic V., “Capital structure in developing countries”, The Journal of Finance, Vol. LVI, (2001) 1.
[23] Eriotis Nikolaos, “How firm characteristics affect capital structure: An empirical Study”, Managerial Finance, 33 (2007) 5, 321.
[24] Faris AL- Shubiri, “Determinants of Capital Structure Choice: A Case Study of Jordanian Industrial Companies”, An-Najah Univ. J. of Res. (Humanities), 24 (2010) 8, 2457.
[25] Bambang Sudiyatno and Septavia Mustika Sari, “Determinants of debt policy: An empirical studying Indonesia stock exchange”, International Research Journal, 4 (2013) 1, 98-108.
[26] Fama EF, French KR. “Testing trade-off and pecking order predictions about dividends and debt”, The Review of Financial Studies, 15 (2002) 1, 1.
[27] Jong AD, Kabir R, Nguyen TT, “Capital structure around the world: the roles of of firm- and country-specific determinants”, Journal of Banking Finance, 32 (2008) 9, 1954.
[28] Sharif et al., “Firm’s characteristics and capital structure: A panel data analysis of Pakistan’s insurance sector”, African Journal of Business Management, 6 (2012) 14, 4939.
[29] Afza Talat, Amer Hussain, “Determinants of Capital Structure across Selected Manufacturing Sectors of Pakistan”, International Journal of Humanities and Social Science, 1 (2011)
12, 254.
[30] Chen, L. H., Lensink, R., & Sterken, E., The determinants of capital structure: Evidence from Dutch panel data, University of Groningen, 1999.