The impact of financial leverage on corporate investment activities: A quantile regression approach for non-financial listed enterprises in Viet Nam

Abstract

This study examines the correlation between the net investment ratio and the extent of debt utilization among 98 publicly traded non-financial firms in Viet Nam, excluding insurance companies, commercial banks, and other credit institutions, throughout the period from 2016 to 2023, employing the quantile regression method. The research findings indicate that enterprises exhibiting a high net investment ratio, characterized by substantial investments in fixed assets (such as machinery, equipment, and real estate), tend to decrease their investment levels more significantly when they increase their reliance on debt compared to those with a low net investment ratio. Consequently, some policy implications are suggested for finance decisions and debt utilization to uphold sustainable corporate investment practices.