Capital Structure and Performance in Vietnamese Construction Firms: Using Quantile Regression Approach

Nham Nguyen (), Bao Nguyen (), Bao To () and Tam Le ()
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Nham Nguyen: University of Economics Ho Chi Minh City, Vietnam
Bao Nguyen: University of Economics Ho Chi Minh City, Vietnam
Bao To: University of Economics Ho Chi Minh City, Vietnam
Tam Le: Nam Dinh University of Technology Education, Vietnam

Economics Bulletin, 2021, vol. 41, issue 3, 1357-1373

Abstract: The paper aims to analyze the impact of capital structure on the performance of construction firms. We used data taken from annual firm survey conducted by General Statistics Office of Vietnam (GSO) associated with 13,912 construction firms. Instead of using only a sample with listed firms, we also added unlisted firms to ensure overall representation. The results from quantile regression show that capital structure positively affects firms' performance. On each different percentile, the level of impact of capital structure is also different. The lower the percentile, the stronger the impact of capital structure on the performance—the strongest impact is at the 0.1 percentile, the lowest is at the 0.9 percentile. This implies that construction firms will well exploit the benefits from debt at lower percentiles. In the high percentiles, construction firms will prioritize using equity over debt.

Keywords: Capital structure; performance; construction firms; quantile regression; Vietnam. (search for similar items in EconPapers)
JEL-codes: G3 (search for similar items in EconPapers)
Date: 2021-09-17
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