THE EFFECT OF CAPITAL STRUCTURE ON CORPORATE PERFORMANCE: EVIDENCE IN VIETNAM

This article aims to investigate the influence of capital structure on corporate performance by using data from 150 Vietnamese listed manufacturing firms from 2008 to 2012. Comparing the results of random effects model (REM) and fixed effects model (FEM), the more appropriate model will be discussed some empirical results. The study found that the capital structure has significant and positive relationship with corporate performance in associated with debt to assets and short-term debt to assets. In contrast, corporate performance is insignificantly influenced by long-term debt to assets. The results also state that there is no existence of optimal capital structure decision.