Financial marketing development and firms' financing choices - Evidence in manufacturing sector on Ho Chi Minh stock exchange (HOSE)

Abstract

Financial market as well as capital structure of firms is always an interesting idea to discuss and hence catches attention of many researchers. This paper aims to examine the effects of Financial Market Development on capital structure of manufacturing sector in Vietnam. A sample of 91 manufacturing firms listed on Ho Chi Minh Stock Exchange (HOSE) over the period 2006-2013 is chosen. Panel regressions are carried out to examine the impact of Financial Market development on the firms’ capital structure. The paper found evidence that three over five macroeconomics variables related to financial market development have significant impact on capital structure of manufacturing firms in Vietnam including Financial Crises, Interest Lending Rate and Stock Market Development. Furthermore, capital structure choice of firms in the sample was also affected by firm-specific characteristics which are Firm Size and Financial Quality by Z-score model.