Title: An approach to corporate capital structure of Southeast Asian countries

Authors: Tri M. Hoang; An Thai

Addresses: School of Economics and Finance, Massey Business School (Albany), Massey University, Private Bag 102904, Northshore Auckland 0745, New Zealand ' Faculty of Finance, University of Economics, The University of Danang, 71 Ngu Hanh Son, Danang, Vietnam

Abstract: This study investigates the determinants of capital structures of listed firms in Southeast Asia, including Vietnam, Thailand, Indonesia, Malaysia, the Philippines and Singapore, between 1995 and 2014. Based on the most up-to-date data from Thompson Innovation, we employ feasible generalised least squares (FGLS) to test funding behaviours of individual countries and the whole region. Empirical evidence supports neither the pecking order theory nor the trade-off model as the best-fit framework to understand the capital structures of firms in Southeast Asia, though the trade-off model has more precise predictions of the data than the pecking order model. Besides, the outcomes demonstrate that understanding firm nationality is necessary to determine countries' conventional corporate capital structure models.

Keywords: corporate finance; capital structure; listed firms; panel data; Southeast Asia.

DOI: 10.1504/AAJFA.2020.106250

Afro-Asian Journal of Finance and Accounting, 2020 Vol.10 No.2, pp.131 - 150

Received: 30 Oct 2017
Accepted: 27 Jun 2018
Published online: 02 Apr 2020 *

Full-text access for editors Full-text access for subscribers Purchase this article Comment on this article