Determinants of Capital Structure of Listed Food and Beverage Manufacturing Companies: the Case in Vietnam

Abstract

This study focused on examining determinants of the capital structure of listed food and beverage manufacturing companies in Vietnam stock market. The purpose of this study also contributes towards a better understanding of financing behavior in Vietnamese food and beverage companies during the period of 2011-2015. Panel data of 47 listed food and beverage manufacturing companies over the period 2011-2015 was analyzed using two estimation models: Random-effects model and Fixed-effects model. The initial nine independent variables represent factors that potentially determine capital structure are adopted in the study including profitability, business risk, firm size, growth opportunities, assets tangibility, liquidity, effective tax rate, non-debt tax shields, and lending interest rate. Empirical results indicate that capital structure of the Vietnamese listed food and beverage manufacturing companies have relationships with 6 main determinants: profitability, business risk, firm size, firm growth, assets tangibility, liquidity.