The purpose of this study is to investigate the impacts of firms’ characteristics on leverage ratio in emerging countries with the case of real estate listed enterprises in Vietnam. We have employed panel data analysis for regression, with short-term debt ratio (STDTA), long-term debt ratio (LTDTA), and total debt ratio (TTDTA) as the response variables. Based on the sample of 32 real estate companies listed on both Hanoi Stock Exchange (HNX) and Ho Chi Minh Stock Exchange (HOSE) during the period from 2010 to 2018, the estimated results from these three models are quite different. The results show that short-term leverage is influenced by firms’ profitability, size, growth opportunities, risk, age, and liquidity. However only risk and liquidity have an impact on long-term leverage. Total leverage is affected by firms’ size, risk, age, and liquidity. Also, a remarkable result from the regression models is that tangibility and non-debt tax shield do not have any influence on leverage ratio. Firms’ liquidity has a significant reverse effect on short-term leverage and total leverage. However, liquidity has a significant positive impact on long-term leverage. Accordingly, the authors propose some discussions for firms to choose an optimal capital structure to maximize the firm’s value. We suggest that real estate firms should not rely heavily on debt finance. They should be financed through several channels which are funds, insurance funds, and venture capitals rather than rely heavily on banks. While profitable firms could use retained earnings to cover most of their investments without publishing information to outsiders, high forecast growth but low profitability firms could use debt financing.
