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http://dx.doi.org/10.13106/jafeb.2020.vol7.no11.801

Factors Affecting Financial Leverage: The Case of Vietnam Firms  

NGUYEN, Chi Dieu Thi (School of Banking and Finance, National Economics University)
DANG, Hong Thuy Thi (School of Trade and International Economics, National Economics University)
PHAN, Nghi Huu (School of Banking and Finance, National Economics University)
NGUYEN, Trang Thuy Thi (Faculty of Mathematics Economics, National Economics University)
Publication Information
The Journal of Asian Finance, Economics and Business / v.7, no.11, 2020 , pp. 801-808 More about this Journal
Abstract
The purpose of the study is to find the factors that influence the financial leverage of Vietnam firms. The dependent variable is the financial leverage and the independent variables are firm size, asset structure, liquidity, growth opportunities, profitability, and firm age. The data are collected from Vietnam firms' annual financial reports in the period from 2010 to 2019. The study uses a sample of 448 Vietnam listed firms in the period. We also employ a panel regression model with pooled OLS and fixed effect to analyze the firms' financial data. The results of the model showed that financial leverage (FL) has a negative relationship with some factors such as asset structure (AS), liquidity (LQ), growth opportunities (GRW), profitability (ROA), and firm age (AGE) in the fixed effect regression. It means that when liquidity, profitability, and firm age increase, firms' financial leverage will decrease. While firms' financial leverage has still a positive relationship with the firm size (SIZE) in the model. As a result, when firm size increases, financial leverage will increase, too. The results showed that models are fit for the research and can be used to predict future findings. It is also useful for enterprises, financial advisors, investors, as well as the financial managers.
Keywords
Capital Structure; Financial Leverage; Financial Structure; Vietnam Firms;
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Times Cited By KSCI : 6  (Citation Analysis)
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