Market competition in banking and asset-liability maturity mismatch of non-financial firms: Evidence from Vietnam

The Impact of Debt Maturity Structure on Financial Resilience: Evidence from Non-Financial Listed Firms on the Vietnamese Stock Market

How the maturity structure of corporate debt shapes firms’ capacity to withstand financial pressure remains understudied, particularly in bank-dependent emerging markets. This study examines whether greater reliance on short-term debt weakens firms’ ability to absorb financial shocks. Using quarterly panel data for non-financial listed firms on the Vietnamese stock market from 2015 to 2025, we construct an accounting-based measure of financial resilience (FR), defined as the ratio of earnings before interest, taxes, depreciation and amortization (EBITDA) to the sum of short-term debt and interest expense, and measure debt maturity structure (DMS) as the proportion of short-term debt in total interest-bearing debt. Firm fixed-effects models with quarterly time fixed effects and firm-clustered standard errors are used to estimate the relationship. The results consistently show that firms with a higher proportion of short-term interest-bearing debt exhibit significantly lower financial resilience across all model specifications. This negative relationship remains robust after controlling for alternative measures of financial leverage and using a logarithmic transformation of the dependent variable. The findings highlight the importance of debt maturity management as a key component of corporate financing strategy for firms and policymakers seeking to enhance financial resilience.

Extreme Capital Structure and Firm Performance in Emerging Economies: The Moderating Role of Liquidity

This study examines the moderating role of liquidity in the relationship between extreme capital structure and firm performance among listed firms in emerging markets. It is motivated by the need to better understand how financing constraints and liquidity management influence firm performance in environments characterised by high financial frictions and limited access to external capital. Extreme capital structure is defined as firms maintaining very low levels of debt, measured using thresholds of 1% (ultra-low debt) and 5% for both long-term debt and total debt. The analysis is based on a panel dataset of non-financial listed firms over the period 2006–2024 and employs a dynamic panel System Generalised Method of Moments (System GMM) complemented by a Random Effects model for robustness. Empirical results indicate that liquidity has a meaningful and predominantly positive moderating effect. This is observed when firms maintain extremely low long-term debt (1% threshold) and low long-term debt (5% threshold). Liquidity enhances firm performance. This effect is strongest for return on assets (ROA) and return on equity (ROE). The effect on Tobin’s Q is weaker but remains generally positive. These findings highlight the strategic importance of liquidity in improving profitability and financial resilience under conservative financing structures. However, the findings are limited to listed non-financial firms in emerging markets and may not be generalizable to SMEs or unlisted firms. Future research could explore the threshold at which liquidity ceases to generate benefits or begins to produce diminishing returns in ultra-low leverage contexts.

Debt, Industry Structure, and Market Valuation: Sector-Specific Evidence from India’s IT and Automobile Firms

The relationship between capital structure and firm market valuation remains a central yet unresolved question in corporate finance, with outcomes shaped critically by industry-specific asset structures and financing environments. This study investigates how capital structure influences market valuations across two structurally divergent sectors in India, the asset-light information technology (IT) industry and the asset-intensive automobile industry, using balanced panel data for 14 firms in each sector over 2005–2024. Fixed effect and random effect panel regression models are employed to isolate the direct effect of leverage on earnings per share (EPS), with model selection determined by the Hausman specification test. Complementing these estimations, the Graphical Lasso is applied to recover a sparse conditional dependence network among key financial variables, an approach particularly suited to this research question, as capital structure, profitability, tangibility, and growth are jointly determined, rendering pairwise correlations insufficient for identifying genuine financial linkages. The findings establish that debt exerts a positive and statistically significant effect on market valuations in both sectors, but through distinct economic channels: moderate leverage amplifies profitable growth signals in IT firms, while tax shield benefits drive valuation in automobile firms, constrained by asset tangibility and debt-servicing thresholds. These results support trade-off theory in the automobile sector and pecking order logic in the IT sector, underscoring that sector-specific financing strategies yield superior valuation outcomes compared to universally applied capital structure prescriptions.

Cash holdings in an emerging market technology sector: evidence from BIST firms within the trade-off and pecking order frameworks

The moderating effect of bank competition on the relationship between income diversification and the sustainable growth of banks within WAMZ

In emerging economies, especially in the West African Monetary Zone (WAMZ), where banks predominate in financial intermediation despite macroeconomic uncertainty, the financial sustainability of banks remains a major policy concern. This study adds two important new findings to the existing literature by examining the impact of income diversification on banks' long-term growth. First, this study employs the sustainable growth rate as the primary performance metric, capturing banks' capacity to expand internally without external funding, in contrast to most earlier studies that focus on short-term profitability or stability metrics. Second, the study provides new evidence on how market structure influences the efficacy of income diversification strategies by explicitly modeling bank competition as an interaction factor in the relationship between income diversification and sustainable growth rate. Using an unbalanced panel of 24 listed banks from Ghana and Nigeria over the period 2015-2024, and a dynamic two-step system generalized method of moments estimator to address endogeneity and persistence, the results show that income diversification greatly improves banks' sustainable growth. More significantly, there is a positive and statistically significant interaction between income diversification and bank competition, suggesting that higher pricing power and more intense competition increase the advantages of income diversification. These results extend the banking literature by demonstrating that the impact of income diversification on long-term growth is conditional on bank market structure. The study presents important policy implications for regulators in the WAMZ, emphasizing the need to promote prudent income diversification strategies alongside a competitive banking environment to enhance financial sustainability.

Macroeconomic conditions and stock returns in Indonesia’s consumer sector: Evidence of sectoral heterogeneity and financial vulnerability

Background: This study examines the impact of macroeconomic conditions on stock returns in Indonesia’s consumer sector, with the objective of determining whether these effects differ across sectoral classifications and firms’ financial conditions. Although existing research broadly recognizes the linkage between macroeconomic indicators and stock returns, much of the literature implicitly assumes homogeneous responses across firms and sectors, particularly within the consumer industry. Methods: Using a quantitative panel data approach, this study analyzes firms in the consumer sector listed on the Indonesia Stock Exchange over the 2015–2024 period, incorporating inflation, policy interest rates, exchange rate growth, money supply (M2), unemployment, and real gross domestic product growth as explanatory variables, while controlling for profitability and leverage. Findings: The analysis employs the Common Effects Model with Panel-Corrected Standard Errors to account for heteroskedasticity and cross-sectional dependence, and introduces sector classification and financial distress, measured by the Altman Z-Score, as moderating variables. The results indicate that the influence of macroeconomic factors on stock returns is heterogeneous rather than uniform: policy interest rates consistently exert a negative and statistically significant effect, whereas the effects of inflation, exchange rate movements, money supply, unemployment, and economic growth vary across sectoral classifications and financial distress conditions, as reflected in several significant interaction terms. Conclusion: These findings imply that aggregate macroeconomic signals are transmitted to stock returns through distinct channels depending on firms’ sectoral positioning and financial health. The study therefore concludes that analyses which overlook such heterogeneity risk producing incomplete or misleading inferences regarding macro–return relationships in emerging markets.  Novelty/Originality of this article: The novelty of this research lies in its integrated moderation framework, which simultaneously considers sector classification and financial distress within a unified panel setting, thereby offering a more nuanced and context-specific understanding of how macroeconomic factors shape stock returns in Indonesia’s consumer sector.