Nam Nguyen Hoang Phi

The impact of liquidity on capital structure and financial performance of non-financial-listed companies in the vietnam stock market

• Authors Details :  
• Nguyen Hoang Phi Nam,  
• Tran Thi My Tuyen

Journal title : Future Business Journal

Publisher : Springer Science and Business Media LLC

Online ISSN : 2314-7210

Journal volume : 10

Journal issue : 1

163 Views Original Article

The primary objective of this study is to conduct a comprehensive analysis of the relationships between liquid- ity (LIQ), capital structure (LEV), and fnancial performance (FIP). Additionally, we seek to investigate the indirect efect of liquidity (LIQ) on fnancial performance (FIP) by examining the intermediary role of the capital structure (LEV) of non-fnancial-listed companies in the Vietnamese stock market. This study utilizes PLS-SEM with a robust sample of 644 non-fnancial-listed companies in the Vietnamese stock market. The fndings suggest that liquidity positively infuences fnancial performance but negatively impacts capital structure. Conversely, capital structure negatively afects fnancial performance. Thus, liquidity indirectly enhances fnancial performance through capital structure mediation. This research result can provide suggestions for non-fnancial enterprises in making fnancial decisions to increase fnancial efciency by increasing the holdings of highly liquid assets to prevent risks and take advantage of new investment opportunities in the future. In addition, increasing the holding of highly liquid assets also reduces debt pressure and reduces interest costs, thereby increasing fnancial efciency. Our research shows that the relationship between economic factors is extremely complex; specifcally, our research shows the true nature of the positive impact of liquidity on fnancial performance, including direct positive efects and indirect positive efects through capital structure. In addition, our research results also show that non-fnancial enterprises that want to increase fnancial efciency need to pay attention to revenue growth, and non-fnancial companies with larger total assets (size) will have more advantages in increasing fnancial performance.

Article DOI & Crossmark Data

DOI : https://doi.org/10.1186/s43093-024-00412-7

Article Subject Details

• Accounting and finance

Article Keywords Details

• capital structure
• financial performance
• indirect effect
• PLS-SEM
• Liquidity

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Article References

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