Capital Structure and Financial Performance of Firms: Evidence from Vietnam

This paper examines the impact of capital structure on financial performance of listed firms in Hanoi stock exchange, the second biggest stock market in Vietnam. The paper uses pooled ordinary least squares (Pooled OLS), fixed effect model (FEM) and random effect model (REM) to process the panel data for the period 2015-2019. The results show that capital structure negatively effect on financial performance, which is represented by three indicators as return on equity (ROE), return on total assets (ROA) and earnings per share (EPS). On the other hand, the firm size positively impact on ROA and EPS while growth opportunities and asset structure negatively affect ROE and ROA.