Impact of financial leverage and Big 4 audit quality on the performance of listed manufacturing companies in Vietnam

Anh Phan (), Thi Thuy Huong Nguyen (), Minh Phuong Nguyen (), Quoc Cuong Truong () and Thi Huong Tra Le ()

International Journal of Innovative Research and Scientific Studies, 2025, vol. 8, issue 3, 233-243

Abstract: This study examines the impact of financial leverage and audit quality, specifically the use of Big 4 accounting firms, on the performance of listed companies in Vietnam. It also explores both internal and external factors that influence the performance of these companies. Data were gathered from the financial statements of 60 listed manufacturing companies, as well as from the General Statistics Office of Vietnam. To find out the relationship between the dependent variable and explanatory variables, this research uses the Pearson test, Hausman test, Breusch-Pagan test, Wald test, and both Fixed and Random Effects Models. The findings indicate that short-term debt, long-term debt, total debt, and audit quality have a significant effect on company performance. In contrast, dividend payout policies were found to have no effect on profitability, while foreign direct investment significantly impacted performance. To enhance their financial performance, listed companies in Vietnam should focus on optimizing their short-term and long-term debt ratios, consider the impact of dividend payouts on shareholder value, and engage the services of Big 4 audit firms for financial statement audits. This research contributes to the literature on how financial leverage and the use of large audit firms influence corporate performance.

Keywords: Audit quality; long-term debt; return on assets; return on equity; short-term debt. (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:aac:ijirss:v:8:y:2025:i:3:p:233-243:id:6478

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