MEASURING IMPACT OF CAPITAL STRUCTURE ON FINANCIAL PERFORMANCE OF VIETNAMESE SOES

Cite this:
Quang, D. X. (2015). MEASURING IMPACT OF CAPITAL STRUCTURE ON FINANCIAL PERFORMANCE OF VIETNAMESE SOES. Innovative Journal of Business and Management, 4(06), 114–117. https://doi.org/10.15520/ijbm.vol4.iss6.37.pp114-117
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Abstract

This research uses the non-linear model to measure the impact of capital structure on financial performance of Vietnamese state-owned enterprises (SOEs). The study results show that there are different relations between capital structure and financial performance at different thresholds. For example, in the range of (0.040; 0.703), capital structure (measured by the ratio of long-term debt on equity) is positively related to financial performance (measured by the ratio of profitability on equity), outside that range, the relation is negative. In this study, we find out that quadratic and cubic non-linear models have a significant in measuring the relationship between capital structure and financial performance.

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