This study analyzes the impact of tax avoidance and institutional ownership on the business leverage ratio. Businesses evade taxes to gain the benefits of increasing current profits and reducing their dependence on external funding. A review of capital structure theory, the trade-off theory of capital structure, the pecking order theory, and studies around the world initially show the impact of the correlation between tax avoidance and institutional ownership on business borrowing and solvency.

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... The paper employs a GLS (Generalized least squares) model to conduct analysis for 207 Vietnamese firms listed on the Ho Chi Minh Stock Exchange (HOSE), with a total of 1,863 observations over the period 2008-2016. The empirical results confirm a negative correlation between tax avoidance activities and the business leverage ratio. However, there is not enough evidence to support a correlation between organizational ownership and the business leverage ratio. JEL classification: G23, G32, H26