Chief Executive Officers (CEOs) generations and firm leverage: Born before or after Doi Moi reform?

Abstract

This study examines the impact of CEO generations on financial leverage in the context of Vietnam’s Doi Moi reform. Using a sample of 5,381 firm-year observations of Vietnamese listed firms from 2014 to 2023, the study applies Feasible Generalized Least Squares (FGLS) and the System Generalized Method of Moments (S-GMM) to analyze the relationship between CEO generation and financial leverage. The findings indicate that CEOs born after the Doi Moi reform are more likely to take higher risks in using leverage, whereas their predecessors tend to adopt more conservative financial strategies. Additionally, the study investigates how CEO decisions shift across two distinct periods: pre- and post-Covid-19. The results reveal that due to the significant adverse impact of the pandemic, post-reform CEOs adjusted their financial strategies by reducing leverage. By highlighting how macro-level reforms and generational differences among CEOs shape capital structure choices, this research provides important implications for corporate governance, risk management, and policy design in transitional economies.