The Effect of Capital Structure on Corporate Performance: Evidence in Vietnam

Hoang Thi Thanh Hang
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Hoang Thi Thanh Hang: Banking University of Ho Chi Minh City

International Journal of Business and Administrative Studies, 2015, vol. 1, issue 2, 68-77

Abstract: This article aims to investigate the influence of capital structure on corporate performance by using data from 150 Vietnamese listed manufacturing firms from 2008 to 2012. Comparing the results of random effects model (REM) and fixed effects model (FEM), the more appropriate model will be discussed some empirical results. The study found that the capital structure has significant and positive relationship with corporate performance in associated with debt to assets and short-term debt to assets. In contrast, corporate performance is insignificantly influenced by long-term debt to assets. On this basis, the article establishes the policy implications for companies, including: increased use of financial leverage, attention to effective exploitation of assets, interest in the conflict of interest between shareholders and creditors.

Keywords: Capital Structure; Corporate Performance; Manufacturing Firms; Vietnam (search for similar items in EconPapers)
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:apa:ijbaas:2015:p:68-77

DOI: 10.20469/ijbas.1.10004-2

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