Foreign Ownership and Corporate Debt in Vietnamese Listed Firms

Abstract:

In the context of international integration, foreign investment capital plays a pivotal role in economic growth while also making an important contribution to promoting information transparency and enhancing the trading liquidity in the Vietnamese stock market. This study aims to examine the impact of foreign ownership on corporate leverage. Using a dataset of 649 firms listed on the Ho Chi Minh City Stock Exchange (HOSE) and the Hanoi Stock Exchange (HNX) over the 2010 - 2024 period, regression results indicate that firms tend to use less debt, particularly long-term debt, as the level of foreign ownership increases. These findings suggest the monitoring role of foreign shareholders as well as their ability to facilitate better access to equity financing.