Abstract :

The relationship between capital structure and company performance was examined in this study. From 2019 to 2023, information was gathered from 29 plastic firms that were listed on the Ho Chi Minh Stock Exchange (HOSE). Each company’s performance was gauged using three variables: ROA, ROE, and EPS. The major components of capital structure are the ratios of total debt to total assets (DA), total debt to equity (DE), short-term debt to total assets (SDTA), and long-term debt to total assets (LDTA). In addition, the model incorporates growth rate (GROWTH) and company size (SIZE) as control variables. Consequently, every performance characteristic of the company is negatively impacted by the majority of the capital structure variables. Notably, this study not only demonstrates the weak association between SDTA and SDTA but also the negative correlation between ROE and capital structure, which was considered minor in many earlier studies. Furthermore, prior research had not consistently shown ROE. Additionally, the study’s findings indicate that size and company performance are positively correlated and have no effect on growth pace.

---

Keywords :

Capital Structure, Firm performance.

---

References :

1. Abor, J. (2005), “The effect of capital structure on profitability: an empirical analysis of listed firms in Ghana”, Journal of Risk Finance, Vol. 6, pp. 438-47.
2. Abor, J. (2007), “Debt policy and performance of SMEs: evidence from Ghanaian and South Africa firms”, Journal of Risk Finance, Vol. 8, pp. 364-79.
3. Amara & Dr. Bilal Aziz (2014), “Impact of Capital Structure on Firm Performance: Analysis of Food Sector Listed on Karachi Stock Exchange”, International Journal of Multidisciplinary Consortium, Vol 1, Issue 1
4. Ebaid, I. E. (2009), “The impact of capital-structure choice on firm performance: empirical evidence from Egypt”, The Journal of Risk Finance, Vol. 10 No. 5, pp. 477-487.
5. Ebrati, M. R., Emadi, F., Balasang, R. S., and Safari, G. (2013), “The Impact of Capital Structure on Firm Performance: Evidence from Tehran Stock Exchange”. Australian Journal of Basic and Applied Sciences, 7 (4), 1-8.
6. Hausman, J. A. (1978). “Specification tests in econometrics”, Econometrica: Journal of the econometric society, 1251- 1271.
7. Olaniyi, Taiwo A., Muyideen Olanrewaju Elelu, and Tunde Saka Abdulsalam. “Impact of capital structure on corporate performance: A pre and post crisis evaluation of selected companies in US.” International Journal of Accounting Research, 2.8 (2015): 1-20.
8. Onaolapo A. A. & Kajola S.O. 2010, “Capital Structure and Firm Performance: Evidence from Nigeria”, European Journal of Economics, Finance and Administrative Sciences, Issue 25, pp. 70-82
9. Saeedi A. & Mahmoodi I. (2011), “Capital Structure and Firm Performance: Evidence from Iranian Companies”, International Research Journal of Finance and Economics, Issue 70, pp. 21-29
10. Umar, M., Tanveer, Z., Aslam, S and Sajid, M. (2012), “Impact of Capital Structure on Firms’ Financial Performance: Evidence from Pakistan”, Research Journal of Finance and Accounting, Vol 3(9), 1-13, (2012).
11. Wald, J. K. (1999). “How Firm Characteristics affect Capital Structure: An International Comparison”. Journal of Financial Research, 22(2), 161–187.
12. Wald, J. K. (1999). “How firm characteristics affect capital structure: an international comparison”, Journal of Financial research, 22(2), 161-187.
13. Wooldridge, J. (2002). Econometric Analysis of Cross Section and Panel Data. MIT Press