The Impact of Stock Return Volatility on Capital Structure Choice: Evidence from Non-Financial Firms Listed on Ho Chi Minh City Stock Exchange

Abstract

This study investigates the impact of stock returns on leverage of non-financial firms listed on the Ho Chi Minh Stock Exchange (HSX) during the period 2010-2019. Using a variety of quantitative methods, our study finds that stock return volatility has a negative impact on capital structure choice in both overall debt leverage and long-term debt leverage in the post-crisis period. Furthermore, macroeconomic factors significantly influence the choice of capital structure. However, these effects show heterogeneity across the firm's capital structure measures.