IDEAS home Printed from https://ideas.repec.org/a/taf/oaefxx/v11y2023i1p2190268.html
   My bibliography  Save this article

Does COVID-19 affect small and medium enterprises’ capital structure in vietnam?

Author

Listed:
  • Quoc Trung Nguyen Kim

Abstract

This study estimates the effect of COVID-19 on listed small and medium enterprises’ capital structures in Vietnam from 2010 to 2020 by a dynamic panel model with 825 observations. Conducting the generalized method of moments, the findings show that COVID-19 is a significant factor affecting small and medium enterprises’ capital structures. The current results are explained based on the signalling theory. Although the findings are consistent with the previous empirical studies indicating the capital structure and exploring its determinants in diverse ways, these studies are interpreted based on agency theory, pecking of order, trade-off theory. Furthermore, our results are robust to a series of endogeneity checks using an alternative method of regression.

Suggested Citation

  • Quoc Trung Nguyen Kim, 2023. "Does COVID-19 affect small and medium enterprises’ capital structure in vietnam?," Cogent Economics & Finance, Taylor & Francis Journals, vol. 11(1), pages 2190268-219, December.
    • Handle: RePEc:taf:oaefxx:v:11:y:2023:i:1:p:2190268
    DOI: 10.1080/23322039.2023.2190268
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/23322039.2023.2190268
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/23322039.2023.2190268?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Nguyen Kim Quoc Trung, 2022. "Board of directors characteristics affect commercial banks’ performance – evidence in Vietnam," Cogent Business & Management, Taylor & Francis Journals, vol. 9(1), pages 2060164-206, December.
    2. Stewart C. Myers & Nicholas S. Majluf, 1984. "Corporate Financing and Investment Decisions When Firms Have InformationThat Investors Do Not Have," NBER Working Papers 1396, National Bureau of Economic Research, Inc.
    3. Judith Jordan & Julian Lowe & Peter Taylor, 1998. "Strategy and Financial Policy in UK Small Firms," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 25(1‐2), pages 1-27, January.
    4. Myers, Stewart C. & Majluf, Nicholas S., 1984. "Corporate financing and investment decisions when firms have information that investors do not have," Journal of Financial Economics, Elsevier, vol. 13(2), pages 187-221, June.
    5. Nguyen Kim Quoc Trung, 2021. "Determinants of small and medium-sized enterprises performance: The evidence from Vietnam," Cogent Business & Management, Taylor & Francis Journals, vol. 8(1), pages 1984626-198, January.
    6. Heider, Florian & Ljungqvist, Alexander, 2015. "As certain as debt and taxes: Estimating the tax sensitivity of leverage from state tax changes," Journal of Financial Economics, Elsevier, vol. 118(3), pages 684-712.
    7. David Roodman, 2009. "How to do xtabond2: An introduction to difference and system GMM in Stata," Stata Journal, StataCorp LP, vol. 9(1), pages 86-136, March.
    8. Hung Dang Ngoc & Van Vu Thi Thuy & Chi Le Van, 2021. "Covid 19 pandemic and Abnormal Stock Returns of listed companies in Vietnam," Cogent Business & Management, Taylor & Francis Journals, vol. 8(1), pages 1941587-194, January.
    9. Guha-Khasnobis, Basudeb & N. Bhaduri, Saumitra, 2002. "Determinants of Capital Structure in India (1990-1998): A Dynamic Panel Data Approach," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 17, pages 761-776.
    10. Murray Z. Frank & Vidhan K. Goyal, 2009. "Capital Structure Decisions: Which Factors Are Reliably Important?," Financial Management, Financial Management Association International, vol. 38(1), pages 1-37, March.
    11. Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
    12. Saibal Ghosh & Goutam Chatterjee, 2018. "Capital structure, ownership and crisis: how different are banks?," Journal of Financial Regulation and Compliance, Emerald Group Publishing Limited, vol. 26(2), pages 300-330, May.
    13. Stulz, ReneM., 1990. "Managerial discretion and optimal financing policies," Journal of Financial Economics, Elsevier, vol. 26(1), pages 3-27, July.
    14. Blundell, Richard & Bond, Stephen, 1998. "Initial conditions and moment restrictions in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 87(1), pages 115-143, August.
    15. Mitchell A. Petersen & Raghuram G. Rajan, 1995. "The Effect of Credit Market Competition on Lending Relationships," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 110(2), pages 407-443.
    16. Stephen A. Ross, 1977. "The Determination of Financial Structure: The Incentive-Signalling Approach," Bell Journal of Economics, The RAND Corporation, vol. 8(1), pages 23-40, Spring.
    17. Rajan, Raghuram G & Zingales, Luigi, 1995. "What Do We Know about Capital Structure? Some Evidence from International Data," Journal of Finance, American Finance Association, vol. 50(5), pages 1421-1460, December.
    18. Sakai, Koji & Uesugi, Iichiro & Watanabe, Tsutomu, 2010. "Firm age and the evolution of borrowing costs: Evidence from Japanese small firms," Journal of Banking & Finance, Elsevier, vol. 34(8), pages 1970-1981, August.
    19. Nico Dewaelheyns & Cynthia Van Hulle, 2010. "Internal Capital Markets and Capital Structure: Bank Versus Internal Debt," European Financial Management, European Financial Management Association, vol. 16(3), pages 345-373, June.
    20. Kieschnick, Robert & Moussawi, Rabih, 2018. "Firm age, corporate governance, and capital structure choices," Journal of Corporate Finance, Elsevier, vol. 48(C), pages 597-614.
    21. David Munro, 2013. "A Guide to SME Financing," Palgrave Macmillan Books, Palgrave Macmillan, number 978-1-137-37378-6, December.
    22. Michaelas, Nicos & Chittenden, Francis & Poutziouris, Panikkos, 1999. "Financial Policy and Capital Structure Choice in U.K. SMEs: Empirical Evidence from Company Panel Data," Small Business Economics, Springer, vol. 12(2), pages 113-130, March.
    23. Ding, Wenzhi & Levine, Ross & Lin, Chen & Xie, Wensi, 2021. "Corporate immunity to the COVID-19 pandemic," Journal of Financial Economics, Elsevier, vol. 141(2), pages 802-830.
    24. F. Voulgaris & D. Asteriou & G. Agiomirgianakis, 2004. "Size and Determinants of Capital Structure in the Greek Manufacturing Sector," International Review of Applied Economics, Taylor & Francis Journals, vol. 18(2), pages 247-262.
    25. Matemilola, Bolaji Tunde & Bany-Ariffin, A.N. & Azman-Saini, W.N.W. & Nassir, Annuar Md, 2019. "Impact of institutional quality on the capital structure of firms in developing countries," Emerging Markets Review, Elsevier, vol. 39(C), pages 175-209.
    26. César Camisón & José Antonio Clemente & Sergio Camisón-Haba, 2022. "Asset tangibility, information asymmetries and intangibles as determinants of family firms leverage," Review of Managerial Science, Springer, vol. 16(7), pages 2047-2082, October.
    27. Awartani, Basel & Belkhir, Mohamed & Boubaker, Sabri & Maghyereh, Aktham, 2016. "Corporate debt maturity in the MENA region: Does institutional quality matter?," International Review of Financial Analysis, Elsevier, vol. 46(C), pages 309-325.
    28. Chen, Jean J., 2004. "Determinants of capital structure of Chinese-listed companies," Journal of Business Research, Elsevier, vol. 57(12), pages 1341-1351, December.
    29. Alexander Kurshev & Ilya A. Strebulaev, 2015. "Firm Size and Capital Structure," Quarterly Journal of Finance (QJF), World Scientific Publishing Co. Pte. Ltd., vol. 5(03), pages 1-46, September.
    30. Charles Muthama & Peter Mbaluka & Elizabeth Kalunda, 2013. "An Empirical Analysis of Macro-Economic Influences on Corporate Capital Structure of Listed Companies in Kenya," Journal of Finance and Investment Analysis, SCIENPRESS Ltd, vol. 2(2), pages 1-3.
    31. Alves, Paulo F. Pereira & Ferreira, Miguel A., 2011. "Capital structure and law around the world," Journal of Multinational Financial Management, Elsevier, vol. 21(3), pages 119-150, July.
    32. Myers, Stewart C., 1977. "Determinants of corporate borrowing," Journal of Financial Economics, Elsevier, vol. 5(2), pages 147-175, November.
    33. Hanousek, Jan & Shamshur, Anastasiya, 2011. "A stubborn persistence: Is the stability of leverage ratios determined by the stability of the economy?," Journal of Corporate Finance, Elsevier, vol. 17(5), pages 1360-1376.
    34. Hidenobu Okuda & Lai Thi Phuong Nhung, 2010. "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 gd09-110, Institute of Economic Research, Hitotsubashi University.
    35. Choi, In, 2001. "Unit root tests for panel data," Journal of International Money and Finance, Elsevier, vol. 20(2), pages 249-272, April.
    36. Harris, Milton & Raviv, Artur, 1991. "The Theory of Capital Structure," Journal of Finance, American Finance Association, vol. 46(1), pages 297-355, March.
    37. Barclay, Michael J. & Heitzman, Shane M. & Smith, Clifford W., 2013. "Debt and taxes: Evidence from the real estate industry," Journal of Corporate Finance, Elsevier, vol. 20(C), pages 74-93.
    38. Faccio, Mara & Xu, Jin, 2015. "Taxes and Capital Structure," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 50(3), pages 277-300, June.
    39. repec:bla:jfinan:v:44:y:1989:i:1:p:19-40 is not listed on IDEAS
    40. Demirgüç-Kunt, Asli & Martinez Peria, Maria Soledad & Tressel, Thierry, 2020. "The global financial crisis and the capital structure of firms: Was the impact more severe among SMEs and non-listed firms?," Journal of Corporate Finance, Elsevier, vol. 60(C).
    41. Murillo Campello & Erasmo Giambona, 2011. "Capital Structure and the Redeployability of Tangible Assets," Tinbergen Institute Discussion Papers 11-091/2/DSF24, Tinbergen Institute.
    42. Beck, Thorsten & Demirgüç-Kunt, Asli & Maksimovic, Vojislav, 2008. "Financing patterns around the world: Are small firms different?," Journal of Financial Economics, Elsevier, vol. 89(3), pages 467-487, September.
    43. Shumway, Tyler, 2001. "Forecasting Bankruptcy More Accurately: A Simple Hazard Model," The Journal of Business, University of Chicago Press, vol. 74(1), pages 101-124, January.
    44. Taj, Saud A., 2016. "Application of signaling theory in management research: Addressing major gaps in theory," European Management Journal, Elsevier, vol. 34(4), pages 338-348.
    45. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 58(2), pages 277-297.
    46. Jalilvand, Abolhassan & Harris, Robert S, 1984. "Corporate Behavior in Adjusting to Capital Structure and Dividend Targets: An Econometric Study," Journal of Finance, American Finance Association, vol. 39(1), pages 127-145, March.
    47. Levin, Andrew & Lin, Chien-Fu & James Chu, Chia-Shang, 2002. "Unit root tests in panel data: asymptotic and finite-sample properties," Journal of Econometrics, Elsevier, vol. 108(1), pages 1-24, May.
    48. Peter MacKay & Gordon M. Phillips, 2005. "How Does Industry Affect Firm Financial Structure?," The Review of Financial Studies, Society for Financial Studies, vol. 18(4), pages 1433-1466.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Temimi, Akram & Zeitun, Rami & Mimouni, Karim, 2016. "How does the tax status of a country impact capital structure? Evidence from the GCC region," Journal of Multinational Financial Management, Elsevier, vol. 37, pages 71-89.
    2. Haifeng Hu & Minjing Qi, 2022. "New Evidence on National Culture and Corporate Financing: Does Institutional Quality Matter?," Sustainability, MDPI, vol. 14(19), pages 1-24, October.
    3. Chakraborty, Indrani, 2010. "Capital structure in an emerging stock market: The case of India," Research in International Business and Finance, Elsevier, vol. 24(3), pages 295-314, September.
    4. Rana El Bahsh & Ali Alattar & Aziz N. Yusuf, 2018. "Firm, Industry and Country Level Determinants of Capital Structure: Evidence from Jordan," International Journal of Economics and Financial Issues, Econjournals, vol. 8(2), pages 175-190.
    5. Mário Santos & António Moreira & Elisabete Vieira, 2014. "Ownership concentration, contestability, family firms, and capital structure," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 18(4), pages 1063-1107, November.
    6. Mohamed, Hisham Hanifa & Masih, Mansur & Bacha, Obiyathulla I., 2015. "Why do issuers issue Sukuk or conventional bond? Evidence from Malaysian listed firms using partial adjustment models," Pacific-Basin Finance Journal, Elsevier, vol. 34(C), pages 233-252.
    7. Zhang, Dongyang & Liu, Deqiang, 2017. "Determinants of the capital structure of Chinese non-listed enterprises: Is TFP efficient?," Economic Systems, Elsevier, vol. 41(2), pages 179-202.
    8. Muhammad Yusuf Amin & Amanat Ali & Bashir Khan, 2019. "Capital Structure of Chinese Firms Across different Sectors: Does Ownership Structure Matter?," Global Economics Review, Humanity Only, vol. 4(2), pages 70-82, June.
    9. Giorgio Canarella & Stephen M. Miller, 2019. "Determinants of Optimal Capital Structure and Speed of Adjustment: Evidence from the U.S. ICT Sector," Working papers 2019-06, University of Connecticut, Department of Economics.
    10. Hanifa, Mohamed Hisham & Masih, Mansur & Bacha, Obiyathulla, 2014. "Testing Sukuk And Conventional Bond Offers Based On Corporate Financing Theories Using Partial Adjustment Models: Evidence From Malaysian Listed Firms," MPRA Paper 56953, University Library of Munich, Germany.
    11. Ebrahim, M. Shahid & Girma, Sourafel & Shah, M. Eskandar & Williams, Jonathan, 2014. "Dynamic capital structure and political patronage: The case of Malaysia," International Review of Financial Analysis, Elsevier, vol. 31(C), pages 117-128.
    12. José López-Gracia & Francisco Sogorb-Mira, 2008. "Testing trade-off and pecking order theories financing SMEs," Small Business Economics, Springer, vol. 31(2), pages 117-136, August.
    13. Viet Anh Dang, 2005. "Testing the Trade-off and Pecking Order Theory: Some UK Evidence," Money Macro and Finance (MMF) Research Group Conference 2005 28, Money Macro and Finance Research Group.
    14. Antonczyk, Ron Christian & Salzmann, Astrid Juliane, 2014. "Overconfidence and optimism: The effect of national culture on capital structure," Research in International Business and Finance, Elsevier, vol. 31(C), pages 132-151.
    15. Pinto, João M. & Silva, Cátia S., 2021. "Does export intensity affect corporate leverage? Evidence from Portuguese SMEs," Finance Research Letters, Elsevier, vol. 38(C).
    16. Rizov, Marian, 2008. "Corporate capital structure and how soft budget constraints may affect it," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 22(4), pages 648-684.
    17. Miguel Acedo-Ramírez & Juan Ayala-Calvo & José Rodríguez-Osés, 2013. "Capital structure of small companies in the Spanish footwear sector: relevant factors," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 4(2), pages 155-173, June.
    18. McMillan, David G. & Camara, Omar, 2012. "Dynamic capital structure adjustment: US MNCs & DCs," Journal of Multinational Financial Management, Elsevier, vol. 22(5), pages 278-301.
    19. İbrahim Yarba & Z. Nuray Güner, 2020. "Leverage dynamics: Do financial development and government leverage matter? Evidence from a major developing economy," Empirical Economics, Springer, vol. 59(5), pages 2473-2507, November.
    20. Mai, Nhat Chi, 2012. "Market timing, taxes and capital structure: evidence from Vietnam," OSF Preprints t3mvs, Center for Open Science.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:oaefxx:v:11:y:2023:i:1:p:2190268. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/OAEF20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.