The Impact of Capital Structure on Risk-Taking Behavior of Non-Financial Firms Listed on HSX

Abstract

Purpose: This study investigates the effect of capital structure on corporate risk-taking among non-financial firms listed on the Ho Chi Minh City Stock Exchange (HSX), and explores variations across industries, ownership types (state-owned vs. non-state-owned), firm size, and the State’s monitoring role.
Design/methodology/approach: Employing a panel dataset of 308 non-financial listed firms over the period 2010–2023, the study applies Feasible Generalized Least Squares (FGLS) estimation with subgroup analyses by industry, size, and ownership type.
Findings: Capital structure has a significant positive impact on corporate risk-taking. The effect varies markedly across industries, ownership types, and firm sizes. Short-term and long-term debt exhibit distinct influences on risk-taking behavior.
Originality/value: This study is among the first in Vietnam to disaggregate debt into short-term and long-term components to identify their separate effects on risk-taking, while providing empirical evidence on the State’s monitoring role through ownership comparison. The findings offer practical implications for optimizing capital structure and for regulators in balancing financial stability with incentives for innovation and reasonable risk-taking.