Title: Capital structure and firm financial performance in Vietnam

Authors: Nguyen Huu Anh; Doan Thuy Duong; Sung Wook Yoon

Addresses: School of Accounting and Auditing, National Economics University, Hanoi, Vietnam ' School of Accounting and Auditing, National Economics University, Hanoi, Vietnam ' David Nazarian College of Business and Economics, California State University, 18111 Nordhoff St., Northridge, 91330-8372, CA, USA

Abstract: We investigate the relation between the capital structure and financial performance of 235 Vietnamese companies listed on the Ho Chi Minh Stock Exchange during 2011-2013. Ordinary least squares (OLS), fixed effect method (FEM) and random effect method (REM) are employed to address econometric issues and to improve the accuracy of the regression coefficients. Furthermore, the dynamic panel generalised method of moments (GMM) estimator is adopted to address the problems of endogeneity, unobservable heterogeneity and simultaneity. The results show that financial performance, measured by return on equity (ROE) and earning per share (EPS), has a statistically significant negative association with leverage level.

Keywords: capital structure; financial performance; Vietnamese listed companies.

DOI: 10.1504/IJAF.2018.093255

International Journal of Accounting and Finance, 2018 Vol.8 No.2, pp.122 - 132

Accepted: 12 Nov 2017
Published online: 05 Jul 2018 *

Full-text access for editors Access for subscribers Purchase this article Comment on this article