Open AccessThe impact of market timing on capital structure: Evidence from Vietnamese listed companies
Author(s) -
Tra Thanh Ngo,
Tuyen Van Tran,
Diep Van Nguyen
Publication year - 2017
Publication title -
khoa học và công nghệ: kinh tế - luật - quản lý
Language(s) - English
Resource type - Journals
ISSN - 2588-1051
DOI - 10.32508/stdjelm.v1iq3.460
Subject(s) - initial public offering , leverage (statistics) , capital structure , profitability index , business , vietnamese , monetary economics , stock market , market timing , financial economics , stock exchange , economics , econometrics , finance , debt , paleontology , linguistics , philosophy , horse , biology , machine learning , computer science
This study uses the theory of market timing in considering capital structure of the sample of 430 companies which are listed on Vietnam's stock market and implemented IPO in the period of 2006 - 2012. Following the research method of Alti (2006), the article used the variable HOT to represent the factor of market timing in order to understand the relationship between this variable and leverage variable in the short-term (in the year of IPO) and in the long-term (year of IPO + 1, IPO + 2, ..., IPO + 6). The results showed no statistically significant evidence about the negative relationship between the HOT and leverage ratios. It implies that in the first time that companies issue their share capital to the public, the ―active‖ or ―gloomy‖ situation of market is not related to the leverage ratio at the moment of observation. In addition, the results also showed that variables relating to characteristics of company such as growth potential, profitability and scale have a statistically significant relation to capital structure and tangible has no impact on leverage ratio.