Market liquidity and capital structure: Does it really matter for Vietnam’s family ownership?

Abstract This study analyzes the moderating effect of different kinds of family ownership on the relationship between market liquidity and capital structure. Using a new sample of 315 Vietnam listed firms for five years, we figured out a significant negative link between stock market liquidity and capital structure. However, it is well noted that there is an adverse reaction from family ownership where the higher the dual-class control and dynamic structure mechanism, the more control-enhancement the family ownership will be, which leads to a higher risk aversion regarding debt-bankruptcy. In this sense, corporate leverage had responded positively to an increase in stock liquidity in the case of family ownership intervention.