Impact of cash flow volatility and debt structure in context of COVID pandemic: A study in Vietnam

Abstract

The study examines the impact of cash flow volatility on the debt structure of listed enterprises in Vietnam in period from 2009 to 2020. We use general least square method and percentile regression to examine this impact. Research results show that there exists an inverse relationship between cash flow volatility and corporate debt structure (financial leverage, short-term debt and long-term debt) of Vietnamese enterprises during the research period. In particular, unlike previous studies on cash flow volatility, this study further examines impact of the COVID pandemic on the relationship between cash flow volatility and debt structure. The test results show that cash flow volatility in the context of the COVID-19 pandemic has an positive impact on debt structure. At the same time, the study also finds that the cash flow volatility will decrease as the percentile of the debt structure increases.