Board characteristics and capital structure: A study on non-financial listed firm HOSE
Abstract
In recent years, the issue of capital structure and its determinants has been
increasingly paid attention by researchers working in the area of finance literature. One of
these considerably factor is Corporate governance. Therefore, this study wants to explore
whether there is a relationship between some specific characteristics of Board – one
corporate governance mechanism and firm’s capital structure. Therefore, the sample of
150 non-financial listed firms on Ho Chi Minh stock exchange during 2012 has been
examined by using Multiple linear regression. Measures of Board characteristics
employed are board size, board composition, CEO duality, number of women and board
ethnicity (race). The research also uses three variables (firm size, profitability, tangibility)
to control the relationship.
The regression shows that Board ethnicity has a negative and significant
relationship with debt level. However, no significant relation was found between board
size, board composition, CEO duality and number of women with capital structure. This
insignificant relationship is due to some possible reasons that will be discussed later in
this research. Moreover, result also shows that control variables like firm size and
profitability have significant impact on firm’s capital structure.