How Does Corporate Governance Affect the Dynamic Capital Structure? Evidence from Listed Family Businesses in Vietnam

Most Vietnamese family companies are still operating under the control of the first generation and are preparing to transfer to the second generation. This paper is the first to examine how corporate governance affects the dynamic capital structure of listed family companies in Vietnam. We employ th...

Full description

Saved in:
Bibliographic Details
Published in:Montenegrin journal of economics 2024-01, Vol.20 (1), p.59-68
Main Authors: Tran, Oanh Kim Thi, Nguyen, Duyvu, Van Nguyen, Diep
Format: Article
Language:English
Subjects:
Asymmetry
Capital structure
Corporate governance
Costs
Family owned businesses
Generalized method of moments
Hypotheses
Stockholders
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:Most Vietnamese family companies are still operating under the control of the first generation and are preparing to transfer to the second generation. This paper is the first to examine how corporate governance affects the dynamic capital structure of listed family companies in Vietnam. We employ the dynamic Generalized Method of Moments (GMM) to analyze a balanced panel with 987 annual observations of 136 listed family businesses from 2005 to 2020 in Vietnam. Our empirical findings indicate that board size, board independence, and CEO duality reduce the leverage ratio in family bus/nesses. Our findings support trade-off theory, agency theory, pecking order theory, and prior literature. Our findings are relevant for managers in the family business to adjust their capital structure which maximizes the shareholder benefits actively.
ISSN:1800-5845
1800-6698
DOI:10.14254/1800-5845/2024.20-1.6