This paper investigates the implications of government borrowing for corporate financing and capital structure of the firms. In doing so, we explore the effects of government debt, macroeconomic and firm-specific factors on firm’s choice of financing and capital structure. We draw on the 10-year data (2007–2017) of 225 non-financial firms listed on the Ho Chi Minh Stock Exchange (HoSE) and employ the system Generalized Method of Moments (system-GMM) for estimation. Our key findings suggest that the government borrowing and debt financing for the Vietnamese listed companies have a negative relationship. Specifically, the short-term corporate leverage structure is influenced more strongly than the long-term leverage structure. We also define the threshold for the association between government borrowing and corporate financing decisions by capturing a U-shaped relationship i.e., Crowding out Kuznets Curve (CKC). Furthermore, macroeconomic factors also show a statistically significant impact on corporate financing decisions. Our findings have profound implications for the fiscal and public policymakers, investors as well as corporate finance managers and firms.

中文翻译：

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新兴经济体政府借款对企业融资的影响：挤出库兹涅茨曲线

本文研究了政府借款对公司融资和公司资本结构的影响。在此过程中，我们探讨了政府债务、宏观经济和企业特定因素对企业融资和资本结构选择的影响。我们利用胡志明证券交易所（HoSE）上市的 225 家非金融公司的 10 年数据（2007-2017 年），并采用系统广义矩量法（system-GMM）进行估计。我们的主要研究结果表明，越南上市公司的政府借款和债务融资存在负相关关系。具体而言，短期企业杠杆结构比长期杠杆结构受到的影响更大。我们还通过捕捉 U 型关系即挤出库兹涅茨曲线 (CKC) 来定义政府借款与企业融资决策之间关联的阈值。此外，宏观经济因素也显示出对企业融资决策的统计显着影响。我们的研究结果对财政和公共政策制定者、投资者以及公司财务经理和公司具有深远的影响。