Capital structure of pharmaceutical companies listed on Vietnamese Stock Exchange: A panel threshold regression analysis

Abstract

Capital structure decision is an important consideration in corporate governance, it affects firm value as well as magnifies income to firm’s owners. So, studying to figure out an threshold optimal capital structure has been an attractive issue for economists all over the world. This paper studies the impact of debt ratio on firm value of pharmaceutical companies listed on Vietnamese Stock Exchange from 2009 to 2016 by using threshold model regression. In this research, we exploit ROE and Tobin as a proxy for firm value. The results are indicators for us to give recommendations about financing policy to listed pharmaceutical for the upcoming years.