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This study analyzes the moderating effect of different kinds of family ownership on the relationship between market liquidity and capital structure. Using a new sample of 315 Vietnam listed firms for five years, we figured out a significant negative link between stock market liquidity and capital structure. However, it is well noted that there is an adverse reaction from family ownership where the higher the dual-class control and dynamic structure mechanism, the more control-enhancement the family ownership will be, which leads to a higher risk aversion regarding debt-bankruptcy. In this sense, corporate leverage had responded positively to an increase in stock liquidity in the case of family ownership intervention.
Keywords
capital structure, family ownership, stock market liquidity
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A new preprint design is coming!
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This is a preprint, a preliminary version of a manuscript that has not completed peer review at a journal. Research Square does not conduct peer review prior to posting preprints. The posting of a preprint on this server should not be interpreted as an endorsement of its validity or suitability for dissemination as established information or for guiding clinical practice.
Original Research
Badges
Prescreen
This manuscript passed our Prescreen assessment
Complete author information
Appropriate declaration statements
Potential risks to human health
Prescreen
History
CURRENT STATUS: Posted
Version 1
Posted 17 Feb, 2021
No community comments so far
Metrics
Comments: 0
PDF Downloads: ...
HTML Views: ...
Subject Areas
Economic Theory
License:
This work is licensed under a CC BY 4.0 License. Read Full License
This study analyzes the moderating effect of different kinds of family ownership on the relationship between market liquidity and capital structure. Using a new sample of 315 Vietnam listed firms for five years, we figured out a significant negative link between stock market liquidity and capital structure. However, it is well noted that there is an adverse reaction from family ownership where the higher the dual-class control and dynamic structure mechanism, the more control-enhancement the family ownership will be, which leads to a higher risk aversion regarding debt-bankruptcy. In this sense, corporate leverage had responded positively to an increase in stock liquidity in the case of family ownership intervention.
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