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Adjustment Speed toward Target Leverage Throughout the Vietnamese Corporate Life Cycle: Under-Versus Over-the-Target Firms

Author

Listed:
  • An Thai

    (The university of Danang)

  • Radu Burlacu

    (CERAG - Centre d'études et de recherches appliquées à la gestion - UGA - Université Grenoble Alpes)

Abstract

This paper aims to provide empirical evidence of adjustment speeds toward an optimal capital structure over the business life cycle in Vietnam. Based on a sample of 838 non-financial Vietnamese firms quoted from 2005 to 2019, the findings show that adjustments toward target leverage levels vary significantly depending on firms’ life cycles. Patterns also vary depending on whether firms are under or above their targets. While a high-low-high pattern is found with under-levered firms, a low-high-low trend is identified for over-levered firms.
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Suggested Citation

  • An Thai & Radu Burlacu, 2022. "Adjustment Speed toward Target Leverage Throughout the Vietnamese Corporate Life Cycle: Under-Versus Over-the-Target Firms," Post-Print hal-03981384, HAL.
    • Handle: RePEc:hal:journl:hal-03981384
    DOI: 10.1007/s41549-022-00069-7
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    More about this item

    JEL classification:

    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • D92 - Microeconomics - - Micro-Based Behavioral Economics - - - Intertemporal Firm Choice, Investment, Capacity, and Financing
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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