Porntip Jirathumrong

Type of the article: Research Article

Abstract
The service industry sector is crucial to Thailand’s employment and economic development. The firm value and sustainable growth of firms in this industry inevitably have a beneficial impact on the country. This study investigates the impact of capital structure and financial distress on sustainable growth and firm value among listed companies in Thailand’s service sector. Using unbalanced panel data from 133 firms listed on the Stock Exchange of Thailand, the analysis encompasses 1,117 firm-year observations spanning the period from 2014 to 2023. Data were sourced from the SETSMART database of the Stock Exchange of Thailand. The empirical findings indicate that capital structure, measured by debt to equity ratio, demonstrates a significant negative influence on both sustainable growth (β = –1.8600, p < 0.05) and firm value (β = –1.7600, p < 0.05), suggesting that excessive leverage undermines long-term performance, while financial distress, as captured by the Z-score, shows positive impact on both sustainable growth (β = 1.1253, p < 0.01) and firm value (β = 0.1578, p < 0.01), indicating that reduced financial distress enhances corporate outcomes. These findings underscore important managerial implications. Service firms should optimize capital structure through balanced debt-equity ratios. Proactive financial distress management is crucial for sustaining growth. This study contributes to the corporate finance literature in emerging markets by empirically validating capital structure theories in Thailand’s unique service sector context while providing practical guidance for financial decision-making.

Type of the article: Research Article

Abstract
Corporate governance plays a crucial role in promoting sustainability by guiding firms toward responsible management that balance growth and accountability. This study examines the impact of corporate governance on sustainable growth of firms in the Thailand Sustainability Investment list and investigates whether the Stock Exchange of Thailand Sustainability Awards moderate this relationship. The analysis utilizes secondary panel data from 183 companies, comprising 778 firm-year observations from 2015 to 2022, sourced from the SETSMART database. The study considers board size, board independence, director shareholding, CEO duality, board meeting frequency, and the presence of risk committee as independent variables, with sustainable growth as the dependent variable. The multiple regression analysis was used to analyze the hypotheses. Empirical results reveal that board size (β = 1.3607, p < 0.05), independent directors (β = 2.1223, p < 0.01), executive shareholding (β = 0.0456, p < 0.10), and the presence of a risk committee (β = 0.1339, p < 0.10) positively affect sustainable growth, while CEO duality has a significant negative impact (β = –1.2335, p < 0.10). Furthermore, the Stock Exchange of Thailand Sustainability Awards played a moderating role, as its interaction with board size (β = 1.2307, p < 0.10) and independent directors (β = 1.3123, p < 0.05) strengthens their positive effects. These findings suggest that effective governance enhances sustainable growth, and sustainability awards amplify this influence among Thai listed firms. The study offers implications for regulators to foster governance frameworks and award programs supporting sustainable growth.