scholarly journals Macroeconomic Factors and Corporate Capital Structure: Evidence from Listed Joint Stock Companies in Vietnam

2017 ◽  
Vol 9 (1) ◽  
pp. 31 ◽  
Author(s):  
Phan Thi Quoc Huong
Keyword(s):  
Capital Structure ◽  
Financial Statements ◽  
Positive Influence ◽  
Stock Exchanges ◽  
Macroeconomic Factors ◽  
Tax Rate ◽  
Macroeconomic Conditions ◽  
Corporate Capital ◽  
Corporate Capital Structure ◽  
Analyze Data

This study is conducted to examine how macro determinants affect capital structure of non-financial joint stock companies in Vietnam. The two-step system GMM is used to analyze data which is a combination of two sources: financial statements of 464 listed joint stock companies on 3 main stock exchanges (HOSE, HNX, and UPCOM), and World Bank database in the period of 2008-2015. The findings show that firms’ capital structure decisions are impacted by elements which reflect macroeconomic conditions. In detail, the inflation rate has positive influence while corporate income tax rate is on the contrary. Besides, the affectation of financial development and institutional quality on capital structure of these enterprises is found clearly. Not only macro factors, this research explores but also other determinants which are characteristics company such as size, profitability, and payment capacity. Finally, it is noticeable that capital structure decisions depend on capital structure of the previous year.

scholarly journals Correlation-and-regression analysis of the influence of macroeconomic factors on capital structure of Russian corporations under crisis conditions

2021 ◽  
Vol 10 (1) ◽  
Author(s):  
Metel’skaya Valeriya Valer’evna
Keyword(s):  
Regression Analysis ◽  
Financial Crisis ◽  
Capital Structure ◽  
Structure Formation ◽  
Macroeconomic Factors ◽  
Optimal Capital Structure ◽  
Corporate Capital ◽  
Correlation And Regression Analysis ◽  
Corporate Capital Structure ◽  
Optimal Capital

AbstractThe study reveals the influence of macroeconomic factors on decisions about the optimal capital structure formation under financial globalization, in view of ever-changing factors of the external economic and geopolitical environment. The study is aimed at empirical testing of hypotheses on how the level of financial leverage of corporations depends on traditional determinants during and after the financial crisis under the emerging market conditions in Russia. The study deals with a large data set of 49 public joint stock companies from 7 leading Russian economic sectors for the period from 2011 to 2017. According to the correlation-and-regression analysis results (1) the use of traditional theories of capital structure under the conditions of current financial globalization in a country with a developing economy proves to be ineffective for the optimal capital structure formation (2) the corporate capital structure formation is strongly influenced by macroeconomic factors, which is most evidently manifested during and after the crisis (3) the financial crisis exerts a strong influence on the corporate capital structure (4) the determinant of stock market development has a significant influence on leverage and plays a prominent role in making financial decisions after the financial crisis.

The Trade-Off Theory of Corporate Capital Structure

2021 ◽  
Author(s):  
Hengjie Ai ◽  
Murray Z. Frank ◽  
Ali Sanati
Keyword(s):  
Interest Rate ◽  
Capital Structure ◽  
Interest Rates ◽  
Dead Weight ◽  
Trade Off ◽  
Tax Rate ◽  
Corporate Capital ◽  
Related Data ◽  
Corporate Capital Structure ◽  
Tax Benefits

The trade-off theory of capital structure says that corporate leverage is determined by balancing the tax-saving benefits of debt against dead-weight costs of bankruptcy. The theory was developed in the early 1970s and despite a number of important challenges, it remains the dominant theory of corporate capital structure. The theory predicts that corporate debt will increase in the risk-free interest rate and if the tax code allows more generous interest rate tax deductions. Debt is decreasing in the deadweight losses in a bankruptcy. The equilibrium price of debt is decreasing in the tax benefits and increasing in the risk-free interest rate. Dynamic trade-off models can be broadly divided into two categories: models that build capital structure into a real options framework with exogenous investments and models with endogeneous investment. These models are relatively flexible, and are generally able to match a range of firm decisions and features of the data, which include the typical leverage ratios of real firms and related data moments. The literature has essentially resolved empirical challenges to the theory based on the low leverage puzzle, profits-leverage puzzle, and speed of target adjustment. As predicted, interest rates and market conditions matter for leverage. There is some evidence of the predicted tax rate and bankruptcy code effects, but it remains challenging to establish tight causal links. Overall, the theory provides a reasonable basis on which to build understanding of capital structure.

scholarly journals The Effects of Corporate Income Tax on Corporate Capital Structure---Based on the Data of Listed Companies in China

2015 ◽  
Vol 8 (1) ◽  
pp. 166
Author(s):  
Li Wenhong ◽  
Wu Jiaqi ◽  
Hu Tianran
Keyword(s):  
Capital Structure ◽  
Income Tax ◽  
Listed Company ◽  
Listed Companies ◽  
Corporate Income Tax ◽  
Tax Rates ◽  
Main Method ◽  
Tax Rate ◽  
Corporate Capital ◽  
Corporate Capital Structure

<p>In 2008, the domestic and foreign corporate income tax systems were unified in China. Based on data of the listed companies in China from 2006 to 2012 and the established model, we find that income tax rates significantly influence the capital structure of listed companies in China, and there is a positive correlation to the asset-liability ratio. When tax rate falls, the listed company will lower financial leverage, and the main method is through increasing its owners' equity, rather than to reduce debt.</p>

scholarly journals Econometric Analysis of the Influence of Macroeconomic Factors on Capital Structure of Russian Corporations under Crisis Conditions

2020 ◽  
Author(s):  
Valeria Valeryevna Metelskaya
Keyword(s):  
Financial Crisis ◽  
Capital Structure ◽  
Structure Formation ◽  
Emerging Market ◽  
Financial Globalization ◽  
Macroeconomic Factors ◽  
Optimal Capital Structure ◽  
Corporate Capital ◽  
Corporate Capital Structure ◽  
Optimal Capital

Abstract The study reveals the influence of macroeconomic factors on decisions about the optimal capital structure formation under financial globalization, in view of ever-changing factors of the external economic and geopolitical environment. The study is aimed at empirical testing of hypotheses on how the level of financial leverage of corporations depends on traditional determinants during and after the financial crisis under the emerging market conditions in Russia. The study deals with a large data set of 49 public joint stock companies from 7 leading Russian economic sectors for the period from 2011 to 2017. According to the correlation-and-regression analysis results, (1) the use of traditional theories of capital structure under the conditions of current financial globalization in a country with a developing economy proves to be ineffective for the optimal capital structure formation (2) the corporate capital structure formation is strongly influenced by macroeconomic factors, which is most evidently manifested during and after the crisis, (3) the financial crisis exerts a strong influence on the corporate capital structure, (4) the determinant of stock market development has a significant influence on leverage and plays a prominent role in making financial decisions after the financial crisis.

scholarly journals Correlation-and-regression Analysis of the Influence of Macroeconomic Factors on Capital Structure of Russian Corporations Under Crisis Conditions

2020 ◽  
Author(s):  
Valeria Valeryevna Metelskaya
Keyword(s):  
Regression Analysis ◽  
Financial Crisis ◽  
Capital Structure ◽  
Structure Formation ◽  
Macroeconomic Factors ◽  
Optimal Capital Structure ◽  
Corporate Capital ◽  
Correlation And Regression Analysis ◽  
Corporate Capital Structure ◽  
Optimal Capital

Abstract The study reveals the influence of macroeconomic factors on decisions about the optimal capital structure formation under financial globalization, in view of ever-changing factors of the external economic and geopolitical environment. The study is aimed at empirical testing of hypotheses on how the level of financial leverage of corporations depends on traditional determinants during and after the financial crisis under the emerging market conditions in Russia. The study deals with a large data set of 49 public joint stock companies from 7 leading Russian economic sectors for the period from 2011 to 2017. According to the correlation-and-regression analysis results, (1) the use of traditional theories of capital structure under the conditions of current financial globalization in a country with a developing economy proves to be ineffective for the optimal capital structure formation (2) the corporate capital structure formation is strongly influenced by macroeconomic factors, which is most evidently manifested during and after the crisis, (3) the financial crisis exerts a strong influence on the corporate capital structure, (4) the determinant of stock market development has a significant influence on leverage and plays a prominent role in making financial decisions after the financial crisis.JEL classification: E22, E44, F6, F15

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