The positive relationship between size and leverage is also viewed as support of asymmetric information (Myers and Majluf 1984). Small size is likely to lead to sever information asymmetries between SME owner and potential lenders in Vietnam, where SMEs are unlikely to have adequate and reliable financial statements (Doanh and Pentley 1999). This situation means SMEs face more difficulties in accessing loans from financial institutions. As predicted by many theories, we hypothesize that: