The impact of large ownership on capital structure of Vietnamese listed firms

Thai, An; Hoang, Tri M.

doi:10.1504/aajfa.2019.10017932

Cited by 2 publications

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“…Foreign ownership is the key independent variable in this study, which is determined as a percentage of shares outstanding owned by foreign investors, consistent with most studies (Huang et al, 2011;Le & Tannous, 2016;Thai, 2017). Remmers et al (1974) argue that different industries have varied situations; they suggest that firms within the same industry, because of similar growth rates, profitability, liquidity requirements and technology, might have similar levels of debt.…”

Section: Independent Variablessupporting

confidence: 75%

Impact of Foreign Ownership on Leverage: A Study of Indian Firms

Gupta

Yadav

Jain

2020

Global Business Review

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Capital structure choice is a corporate decision which provides a combination of securities used to finance the investment requirements ( Myers, 2001 ). That the ownership of a firm influences its decision-making process is a well-accepted economic proposition. Due to liberalization and continuous measures initiated by the Indian government to make India more business-friendly, foreign ownership has assumed a prominence in many Indian firms. In this regard, this article aims to examine the impact of foreign ownership on the financing mix, employing the data of non-financial firms constituting the Nifty 200 index, for the period 2007–2018; the data have been extracted from Bloomberg® and Ace Equity®. Using the generalized method of moments (GMM) technique for empirical analysis, the study observes that there is a statistically significant negative relationship between foreign ownership and leverage.

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Section: Independent Variablessupporting

confidence: 75%

Impact of Foreign Ownership on Leverage: A Study of Indian Firms

Gupta

Yadav

Jain

2020

Global Business Review

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“…5. Stockplus belongs to FiinGroup (https://fiingroup.vn/) which is a leading integrated service provider of financial data in Vietnam. The data source is widely used in published papers, such as Thai and Hoang (2019), Nguyen et al (2020).…”

Section: Notesmentioning

confidence: 99%

Unexpected investment, tunnelling and financial constraints

Thai

2021

IJOEM

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PurposeBased on a sample of 1,435 Vietnamese listed firms over the period from 2005 to 2017, this study examines the sensitivity of unexpected investment to free cash flow and its mechanism.Design/methodology/approachWe tested three hypotheses using two-step system-GMM to investigate investment–cash flow sensitivity for various firm scenarios while accounting for confounding variables.FindingsFirms with negative free cash flow are more likely to engage in underinvestment; conversely, overinvestment is found primarily in firms with positive free cash flow. In terms of the mechanism, while underinvesting decisions are caused mainly by financial constraints, overinvesting behaviour primarily resulted from agency problems, typically in the form of principal-principal conflicts. Interestingly, under the impact of negative cash flow observations, financial constraints tend to decrease investment–cash flow sensitivity. Conversely, the agency costs hypothesis reveals that agency problems are more likely to increase investment–cash flow sensitivity.Originality/valueThese findings not only contribute to the current corporate literature but also provide some important practical implications for stock market investors, corporate managers, and policy-setting bodies, specifically in the Vietnamese market.

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The impact of large ownership on capital structure of Vietnamese listed firms

Cited by 2 publications

References 0 publications

Impact of Foreign Ownership on Leverage: A Study of Indian Firms

Impact of Foreign Ownership on Leverage: A Study of Indian Firms

Unexpected investment, tunnelling and financial constraints

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