Capital Structure Decisions and Firm Performance of Vietnamese Soes

Abstract

This paper examines relationships between capital structure decisions, firm performance, and Vietnamese state-owned enterprises (SOEs). Capital structure decisions are considered by short- and long-term debts respectively. We consider 1,580 firm-quarter observations of Vietnamese non-financial listed firms during 2007?2011 by applying panel data regression. Our results show that short-term capital structures decisions are found to be significantly negative associated with accounting-based firm performance but long-term capital structures decisions are positively related to market-based firm performance. Additionally, due to socialist market economy reforms, we further show that SOEs are less dominant influence in firm performance. We also find no effects of taxation on firm performance after a series of deregulation of taxation. Finally, 2008 financial crisis event changes relations between capital structure decisions and firm performance of Vietnamese SOEs. Therefore, the Vietnamese experience offers an opportunity to gain new insight.

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