THE IMPACT OF ECONOMIC POLICY UNCERTAINY ON THE CAPITAL STRUCTURE OF ENTERPRISES IN VIET NAM

Abstract

The study aims to examine the impact of economic policy uncertainty on the capital structure of listed firms in Vietnam. It utilizes data from 318 Vietnamese listed companies over the period 2015–2023. The research employs OLS, FEM, REM, and GLS regression methods for analysis and discussion. The results from this dataset indicate that economic policy uncertainty has an inverse effect on firms' capital structures. Specifically, when the level of economic policy uncertainty increases, firms tend to reduce their debt and equity ratios to minimize risk. In addition, capital structure is also influenced by factors such as firm size, profitability, business risk, and economic growth rate. Based on these findings, the study proposes several policy implications to support firms in optimizing their financial strategies amid an unstable economic environment.