Capital Structure and Firms’ Performance: Evidence from Vietnam’s Stock Exchange

  •  Tristan Nguyen    
  •  Huy-Cuong Nguyen    


Our paper examines what impact capital structure has on firms’ performance in selected firms listed on HCMC Stock Exchange. The data is collected from 147 listed companies during the period from 2006 to 2014. The study not only checks the impact the level of leverage has on firms’ performance, which is found to be negative in this study, but it also uses the short-term and long-term debt ratios to see the effect of debt maturity. However, there is no difference whether it is short-term or long-term. Tangibility is found to be negative with a very high proportion on average. With the suggestion that companies might invest too much in fixed assets and there is a lack of efficiency, this could be the alert for firms to improve their management process. Size and growth are found to be positive, since larger firms have lower costs of bankruptcy and higher growth rates associate with higher performance. Moreover, the study also adds the effects of industry and macroeconomics, and the result shows a correlation between the two factors and firms’ performance.

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