Effects of capital structure on performance of commercial banks in Vietnam

Abstract:

This paper adds empirical evidence on the relationship between capital structure and the performance of commercial banks. We use balance sheet data of 25 joint stock commercial banks operating in Vietnam from 2011 to 2021. ROE measures the performance, and the total debt ratio is the explanatory variable. Regression techniques REM, FEM, and FGLS were used to explore this relationship. The results show that there is no evidence to confirm the impact of capital structure on the performance of banks. Also, the paper shows the positive effects of the control variables on the performance of joint stock commercial banks in Vietnam.