Impact of capital structure on firm performance of food industry in Vietnam

Abstract

Food industry is one of the essential fields of the Vietnam economy. The output of the food industry has contributed significantly for the total gross domestic product (GDP), in particular, is estimated that the annual food consumption accounts for about 15% of GDP, suggesting this is a potential industry, attract not only domestic investors but also international investors. A great problem for management and investors alike is whether there exists an optimal capital structure and how various capital structure decisions, both short-term and long-term, influence business performance. Therefore, we want to find the impact of capital structure on firm performance of food industry in Vietnam. The study used a cross-sectional design, using secondary data contained in the financial statements and annual report of 26 Food Joint Stock company listed on the Vietnam stock exchange is HNX and HOSE. OLS is the method used in the study, the results of regression for different conclusions. The results of the study have provided an information, a significant impact to the business managers. From there have a clearer view of the impact of capital structure for the company performance. Based on which, they can make the right conclusion in the next step of their business.