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The interaction of institutional quality and human capital in shaping the dynamics of capital structure in Vietnam

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  • Enrico Santarelli
  • Hien Thu Tran

Abstract

The aim of this paper is to find which of two theories of capital structure—trade-off theory or pecking order theory—best explains the capital structure decision of non-state firms during the post-transition process in Vietnam. We also investigate the effect of human capital, institutional quality, and their interaction on the capital structure decision. For empirical evidence, we use a unique database provided by the CIEM-DANIDA project covering around 2,000 micro, small, and medium-sized enterprises in Vietnam for each year from 2003 to 2014.

Suggested Citation

  • Enrico Santarelli & Hien Thu Tran, 2018. "The interaction of institutional quality and human capital in shaping the dynamics of capital structure in Vietnam," WIDER Working Paper Series wp-2018-66, World Institute for Development Economic Research (UNU-WIDER).
    • Handle: RePEc:unu:wpaper:wp-2018-66
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