The Effect Of Ownership Structure On Capital Structure: Evidence From Hose

Abstract

The primary objective of this study is to examine how different types of ownership structure correlate to capital structure in Vietnamese publicly traded firms on the HOSE over the period 2015-2019. I find that government and foreign ownership have a negatively significant impact on a firm’s leverage decisions, which is consistent with some previous studies. While most of the prior studies only focus on the relationship between capital structure and firm performance in the Vietnamese context, this study shed light on it by contributing to the literature about ownership composition. Unfortunately, no significant and positive correlation between government ownership and capital structure decisions was found. The research's conclusions are consistent with the difficulties caused by agency conflicts and the existence of information asymmetry.