Board characteristics and Capital Structure: A study of listed firms in HCM city stock exchange (HOSE)
Abstract
The main purpose of this study is to analyze the relationship between one corporate governance mechanism, board of directors and capital structure decision of Vietnamese companies quoted at Hochiminh City Stock Exchange (Hose). The sample of
the study consists of 200 non financial firms in 2011 and 2012 data available on their websites and HOSE website. Board size, board composition and CEO duality for corporate governance variables are used.
The results show that the relationship between corporate governance and capital structure is statistically significant and the direction is negative for board size and board composition (proportion of non- executive directors in the boards). However, CEO duality appears to be significantly positive related to firm’s leverage (only in 2011). Additionally, other control variables such as firm size and return on assets, growth on assets are found to have a significant effect on capital structure. Therefore results suggest that board characteristics variables like board size, presence of non- executive directors
and CEO duality play important role in determination of financial mix of the firms.