Impact of capital structure on firm performance: An empirical study of listed manufacturing companies in Vietnam
Abstract
This paper examines the relationship between firm’s capital structure and its financial and market performance among a sample of 71 manufacturing companies listed on the Vietnamese stock exchange during the period 2005-2011. We use multiple regressions as
the main method of analysis. The results suggest that for listed manufacturing companies
in Vietnam debt ratio has negative relationship with financial performance (measured by ROA). In terms of market performance (with Tobin’s Q as indicator), we see the consistent positive relationship between firm’s debt ratio and its Tobin’s Q. Moreover,
the study gives evidence that firm’s size is negatively related with its ROE and Growth
opportunity has significant positive relationship with firm’s performance in case of
Exporting companies and Consume Good companies.