Capital Structure, Working Capital, and Governance Quality Affect the Financial Performance of Small and Medium Enterprises in Taiwan

Anh-Huyen Vu Thi and The-Dong Phung
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Anh-Huyen Vu Thi: Academy of Policy and Development, Hanoi 100000, Vietnam
The-Dong Phung: National Financial Supervisory Commission, Hanoi 100000, Vietnam

JRFM, 2021, vol. 14, issue 8, 1-13

Abstract: This study examines the impact of capital structure, working capital, and governance quality on the financial performance of small- and medium-sized enterprises in Taiwan using a sample of more than 2000 firms from the Taiwan Economic Journal (TEJ) during the 24-year period of 1995–2018. Panel data are used to create statistics for the regression model. The result shows that a firm’s capital structure, represented by the debt ratio, has a significantly negative impact on the firm’s financial measures (return on assets (ROA) and return on equity (ROE)), where the working capital, represented by the cash conversion cycle (CCC), has a negative impact and governance quality, represented by the board size, cash dividend distribution, and the percentage of directors, has different impacts.

Keywords: capital structure; working capital; governance quality; financial performance (search for similar items in EconPapers)
JEL-codes: C E F2 F3 G (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (5)

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