Tax Shields and Capital Structure of Real Estate Firms in Emerging Markets: Evidence from Vietnam

This study examines the impacts of tax shields on the capital structure of real estate companies in an emerging country – the case of Vietnam. The research data includes 58 real estate enterprises listed on the Ho Chi Minh Stock Exchange (HOSE) from 2019 to 2023. The impact is estimated by using the feasible generalized least squares model. The results show that a non-debt tax shield is negatively correlated with capital structure, while the debt tax shield has no significant impact. In other words, the non-debt tax shield dominates the debt tax shield in shaping capital structure decisions for real estate companies. Additionally, we find the intensifying impact of the COVID-19 pandemic on the relationship between non-debt tax shield and capital structure.