Debt maturity structure in Vietnamese firms using quantile regression and oaxaca-blinder decomposition technique

and the results remain relatively the same, solidifying our findings. The results related to FC5_index and FC3_index are not reported for the brevity sake, but can be provided upon requested. In the following session, we perform the decomposition of the differential in DM structure between the two groups of firms divided by financial constraints (FC6_index). Here we only discuss differences that are significantly different from zero. Table 4 shows that the unconstrained firms have longer DM than constrained counterparts, at 34.12% and 21.76% respectively. The difference is therefore 12.36% which is significantly different from zero and is decomposed into 2 parts due to the differences in the average 236 values and the coefficients of the variables. It is clear that difference in average value only account for 41% of the differences (the explained part) while the varying coefficients of the variables account for the majority of the difference (the unexplained part). Table 4. Oaxaca Blinder decomposition – General comparison Oaxaca Blinder Decomposition Coef. Std. Err. Z - Statistics P-value Unconstrained 0.341178 0.027511 12.40 0.000 Constrained 0.217566 0.010834 20.08 0.000 Difference 0.123613 0.029567 4.180 0.000 Explained 0.051018 0.016389 3.110 0.002 Unexplained 0.072594 0.032012 2.270 0.023 Source: Author’s calculation Table 5 shows the differences in the average values of factors between the two groups (or the breakdown of explained differences), but we only focus on the differences that are significantly different from zero (p-value smaller than 10%). These include size (accounting for about 20% of the explained difference), tangibility (20%) and leverage (40%), whose values are larger for unconstrained group versus the other group. The superiority of unconstrained firms in terms of these factors implies that these firms tend to be larger and have more fixed assets, so suffer less from information asymmetry, and they are more capable of accessing long-term financing. Unconstrained firms have higher leverage, and, according to liquidity risk theory, higher leverage necessitates longer maturity, even though with strong financial profiles (fc6_index is larger than 4) those firms can shoulder high leverage. Table 5. Oaxaca-Blinder decomposition with the explained debt_maturityit debt_maturityit Explained Coef. Std. Err. Z - Statistics P-value sizeit -0.01541 0.00587 -2.62 0.009 tangit -0.01231 0.00695 -1.77 0.077 growthit -0.00003 0.00043 -0.88 0.935 asset_matit -0.00029 0.00031 -0.96 0.335 taxit -0.00083 0.00123 -0.67 0.501 turnoverit -0.00377 0.00433 -0.87 0.383 leverageit-1 -0.02197 0.01068 -2.06 0.040 termt -0.00761 0.00475 -1.60 0.109 bankdevt -0.00208 0.00249 -0.84 0.404 stockdevt -0.00719 0.00345 -0.21 0.835 Total -0.05101 0.01638 -3.11 0.002 Source: Author’s calculation The unexplained difference is again analysed for the differences in the coefficients that are not zero (table 7): size, growth, asset maturity. Interestingly, an unconstrained firm tend to borrow more long-term debt to finance the investment (when having more growth opportunities) than their constrained counterparts. For unconstrained firms, having a larger scale seems to be more involved in agency cost from “empire 237 building” issue, so shortening DM as a measure to tackle this issue is needed. Finally, constrained firms tend to be careful with the maturity matching of their assets and debt probably due to their weaker financial conditions. In summary, the Oaxaca-Blinder decomposition adds robust check to our findings that financially unconstrained firms care more about agency cost from high ratios of long-term debt. Meanwhile, constrained firms are more prone to both agency cost, liquidity risk and information asymmetry. These findings are in line with Stephan, Tsapin [1] for Ukrainian firms since the authors claim that smaller firms (more constrained firms) are influenced by information asymmetry and liquidity risk (so matching asset- DM, size and signalling are critical for these firms). Table 6. Oaxaca-Blinder decomposition with the unexplained debt_maturityit debt_maturityit Unexplained Hệ số Sai số chuẩn Thống kê Z P-value sizeit -0.8366 0.4333 -1.93 0.054 tangit -0.0168 0.0489 -0.34 0.731 growthit -0.0164 0.0066 -2.47 0.013 asset_matit -0.0063 0.0030 -2.07 0.039 taxit -0.0819 0.0593 -1.49 0.137 turnoverit -0.0597 0.0469 -1.27 0.203 leverageit-1 -0.0312 0.0235 -1.32 0.185 termt -0.0270 0.0326 -0.83 0.407 bankdevt -0.1389 0.5403 -0.26 0.797 stockdevt -0.1800 0.2256 -0.80 0.425 constant -0.9850 0.6391 -1.54 0.123 Total -0.0725 0.0320 -2.27 0.023 Source: Author’s calculation 5. CONCLUSION The purpose of this research is to analyse the distinctiveness behaviour between financially constrained and unconstrained firms with reference to DM choices in Vietnam. Two respective methods are utilized: quantile regression to investigate the instruments in which firms respond to the diverse levels of liquidity risk and agency cost across the DM distribution and Oaxaca Blinder decomposition for the contributors formulating difference in the average DM of constrained and unconstrained firms to be explored. From both methods, according to our results, it is appropriate to state that unconstrained firms furnished with stronger financial profiles are more likely to endure the effects of liquidity risk and information asymmetry, whereas those constrained seem to be subjected to various consequences resulting from these frictions. The findings also suggest that both groups are intrigued by the act of diminishing agency cost correlated with high ratios of long-term debt. Thus, the evidence of this paper is in proportion to the work of Stephan, Tsapin [1] for Ukrainian firms while holding a fair distinction in comparison with Zhao [2] for US firms. 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