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Capital Structure and Performance in Vietnamese Construction Firms: Using Quantile Regression Approach

Author

Listed:
  • Nham T.H. Nguyen

    (University of Economics Ho Chi Minh City, Vietnam)

  • Bao K.Q. Nguyen

    (University of Economics Ho Chi Minh City, Vietnam)

  • Bao C.N. To

    (University of Economics Ho Chi Minh City, Vietnam)

  • Tam T.H. Le

    (Nam Dinh University of Technology Education, Vietnam)

Abstract

The paper aims to analyze the impact of capital structure on the performance of construction firms. We used data taken from annual firm survey conducted by General Statistics Office of Vietnam (GSO) associated with 13,912 construction firms. Instead of using only a sample with listed firms, we also added unlisted firms to ensure overall representation. The results from quantile regression show that capital structure positively affects firms' performance. On each different percentile, the level of impact of capital structure is also different. The lower the percentile, the stronger the impact of capital structure on the performance—the strongest impact is at the 0.1 percentile, the lowest is at the 0.9 percentile. This implies that construction firms will well exploit the benefits from debt at lower percentiles. In the high percentiles, construction firms will prioritize using equity over debt.

Suggested Citation

  • Nham T.H. Nguyen & Bao K.Q. Nguyen & Bao C.N. To & Tam T.H. Le, 2021. "Capital Structure and Performance in Vietnamese Construction Firms: Using Quantile Regression Approach," Economics Bulletin, AccessEcon, vol. 41(3), pages 1357-1373.
    • Handle: RePEc:ebl:ecbull:eb-20-01264
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Capital structure; performance; construction firms; quantile regression; Vietnam.;
    All these keywords.

    JEL classification:

    • G3 - Financial Economics - - Corporate Finance and Governance

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