Comparative Research On Capital Structure Of Vietnamese And Chinese State–Owned Enterprises

Equitization of SOEs made a strong move for Vietnamese SOEs,increased all-sized autonomy for enterprises in raising capital and establishing the target capital structure for their businesses.However,capital structure is not only affected by financial factors but also by other internal and external factors of the enterprises,which may include state ownership,corporate governance,cultural and political factors,institutional environment...State ownership in SOEs has been a hot topic today,it itself significantly affects capital structure.It contains full internal influence on the decisions of capital raising of SOEs.Capital market in Vietnam is changing vigorously and gradually asserted its role,financial market is regulated drastically by the state,so its contribution to the restructuring of capital for enterprises in general and SOEs in particular will have good effect,creating favourable conditions for seeking and building target capital structures for the enterprises.The purpose of this study is to examine on one hand the level of impact of groups of factors affecting capital structure in the specific environment of Vietnam during the p eriod 2006-2012.Accordingly,the study examines following specific issues:The first part is an overview of capital structure basic theories,by systemizing theoretical and empirical literature of capital structure,to provide a comprehensive view on the volatility of the enterprises' capital structures in a market economy.The second part is qualitative analysis of current status of SOEs capital structure over time.Based on literature review synthesized by author,the study thereby provides an analysis of reform process of SOEs capital structure in the past time,as well as assessments on current SOEs capital structure,points out causes of limitations of capital restructuring in the last period of time.The third part is based on comparative analysis of capital restructuring of Chiness SOEs to draw valuable experiences for SOEs restructuring process in the future,as well as contribute to the search for target capital structure of SOE executives amid the context of a wide range of similarities between t he two countries China and Vietnam.The fourth part is through the most latest surveyed cross-table data to conduct the testing of quantitative measurement of SOE capital structure.One of our findings is that in the range of(0.040;0.703),the rate of l ong-term debt on equity of SOEs will generate positive effects for ROE.The fifth part is recommendations on SOE capital restructuring.Groups of specific recommendations include quantitative and qualitative measures and proposed measurement model of the optimal capital structure.Some macro and micro recommendations will bring certain values contributing to the capital restructuring and searching for SOE target capital structure for in the future.The research has substantial contributions as follows: First,the study adopts a threshold regression model to test the target capital structure for SOEs;Second,it systematizes theories of capital structure,as well as applications which help business executives have an overview of capital structure and optimal capital structure;Third,quantitative and qualitative analysis of the research will be useful for making policies of SOE's capital restructuring in the time to come;Fourth,results of this study will be the basis for more extensive researches in capital structure in the context of emerging markets like Vietnam.