A data-driven approach to understanding capital structure behavior of emerging listed manufacturing firms in Vietnam

Resumen

This study delves into the complex relationship between capital structure decisions and the propositions of the trade-off theory and pecking order theory using panel data analysis. The trade-off theory suggests an ideal balance in the capital structure that considers the benefits of tax advantages and the costs associated with financial distress. On the other hand, the pecking order theory highlights the preference for internal financing due to information asymmetry. Employing a dataset of listed firms on the HNX and UPCOM stock exchanges from 2020 to 2022, the research examines how these theories shape the financing choices of manufacturing companies using the panel regression analysis in STATA statistical software. The findings indicate a positive impact of growth opportunities, gross profit, and firm age on capital structure while revealing a negative effect of profitability, asset attribute, liquidity, and corporate income tax on capital structure. This study seeks to clarify the observed trends and changes in the choices made by companies regarding their capital structure, shedding light on the interplay between theory and real-world financial practices among manufacturing firms.