E ISSN: 2583-049X
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International Journal of Advanced Multidisciplinary Research and Studies

Volume 2, Issue 2, 2022

Impact of capital structure on financial performance of listed steel firms in Vietnam



Author(s): Mai Huong Pham, Ngoc Mai Nguyen, Thu Ngan Vu, Thi Minh Phuong Le, Thi Thu Hien Nguyen, Manh Dung Tran

Abstract:

This study is conducted to evaluate the impact of capital structure on the financial performance of steel firms in Vietnam. Data for the research process were collected on the financial statements of steel firms listed on the Vietnam Stock Exchange, audited for the period 2014-2019. This study employs fixed effects model (FEM) and random effects model (REM) together with some other testing methods such as FGLS, GLS, Hausman model to test different defects as well as evaluate the suitability of the model, thereby analyzing the influence of the factors of capital structure on the financial performance of listed sample firms. The results indicate that tangible assets have a positive impact on return on equity. In contrast, risk, liquidity, and firm size have the opposite effects. Long-term debt and short-term debt have a negative impact on return on sales. In addition, growth sales in the scope of this research, is not statistically significant. Based on the results, a number of recommendations are proposed to help firms optimize the capital structure and improve the financial performance.


Keywords: Capital structure, financial performance, listed steel firms, Vietnam

Pages: 219-227

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