The impact of financial leverage on investment decisions for low-growth firms versus high-growth firms - Evidence from listed real estate companies in Vietnam
Abstract
The study analyzes the effect of financial leverage on investment decisions
of real estate listed companies on HOSE and HNX over the period 2013-2019. In
particular, the research also examines the role of growth opportunities on the
association between debt financing and corporate performances for companies with
different potential chances.
There are three regression methods in panel data including pooled OLS,
fixed effect, and random effect model. In order to find out the most appropriate
regression, Lagrangian Multiplier specification test and Hausman specification test are
employed.
Consistent with the literature, the research reports that there is an adverse
correlation between debt level and investing activities. Specially, this interaction has
significant impacts on low-growth companies rather than high-growth companies.
Keywords: Leverage, Investment, Vietnam.