The Nexus Between Capital Structure and Stock Prices: Evidence from Non-agricultural Firms in Vietnam

Abstract

The paper used the generalized least square (GLS) method to investigate the nexus between capital structure and stock price of 438 non-agricultural firms listed in Vietnam Stock Exchange for the period 2014-2020. The empirical results indicate that capital structure negatively significant impacts on stock price. In turn, the stock price affects positively and significantly capital structure. The empirical evidence shows that the market timing, the signaling and the pecking order theories are appropriate to explain the nexus between capital structure and stock price of non-agricultural companies in Vietnam.