Bank ties, institutional pressures, and capital structure of Vietnamese SMEs
International Journal of Entrepreneurial Behavior & Research
ISSN: 1355-2554
Article publication date: 25 May 2022
Issue publication date: 12 August 2022
Abstract
Purpose
This article studies the moderating effect of institutional pressures on the impact of bank ties on the capital structure of small and medium-size enterprises (SMEs).
Design/methodology/approach
The study uses an unbalanced longitudinal dataset covering three years—2011, 2013 and 2015—from a project on small manufacturing enterprises in Vietnam. The sample consists of 7,680 firm-year observations.
Findings
Pressures from formal and informal institutions lessen the positive effect of bank ties on the capital structure of SMEs. These moderating effects are more salient in regions having lower institutional quality.
Originality/value
Empirically showing how institutional factors can be investigated together with relational factors to explain the capital structure of SMEs in a developing economy. Distinguishing between formal and informal institutional pressures and revealing their indirect effect on SMEs' capital structure through impacting the effect of bank ties.
Keywords
Acknowledgements
Conflicts of interest/competing interests: The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.
Availability of data and material: https://www.wider.unu.edu/database/viet-nam-sme-database
Code availability: Yes.
The authors' special thanks go to Professor Paul Jones, Editor-in-Chief, Dr. Witold Nowiński, Editor of the International Journal of Entrepreneurial Behavior & Research and the reviewers for their kind supports and helpful comments. This research is funded by Vietnam National Foundation for Science and Technology Development (NAFOSTED) under grant number 502.02-2017.10. The authors are solely responsible for the contents of the paper.
Citation
Ngo, V.D., Nguyen, T.V. and Roy, A. (2022), "Bank ties, institutional pressures, and capital structure of Vietnamese SMEs", International Journal of Entrepreneurial Behavior & Research, Vol. 28 No. 6, pp. 1489-1507. https://doi.org/10.1108/IJEBR-09-2021-0764
Publisher
:Emerald Publishing Limited
Copyright © 2022, Emerald Publishing Limited