Financial leverage, Tax, Financial distress and Firm value: The case of non-financial firms listed in Vietnam

Abstract

The objective of the article is to evaluate the moderating role of tax and financial distress on the impact of financial leverage on firm value for the case of non-financial firms listed in Viet Nam. The research sample is determined by purposive sampling method, including 504 companies in the period 2015-2020, and accordingly the authors used secondary data collected from audited financial statements of companies. Based on the conclusion about robustness and stability, the GLS estimation results confirmed that firm value is positively affected by the financial leverage, but it is negatively affected by tax and financial distress. In addition, financial distress as a moderating variable increased the positive impact of financial leverage on firm value, while the moderating role of tax on this impact is insignificant. Research results are empirical evidence that contributes to clarifying relevant theories, and they provided useful information for financial managers and other entities to make reliable decisions.