Effect of Capital Structure on the Profitability of Plastic and Packaging Companies Listed in Vietnam

Abstract

Purpose: The study aimed to analyse the impact of capital structure on the profitability of plastic and packaging companies listed on the Vietnam Stock Exchange - VNX (HNX, HoSE and Upcom). Theoretical framework: The study inherits previous studies on the relationship between capital structure and profitability to determine the capital structure that affects profitability. Design/methodology/approach: Using Qualitative Research (Synthetic Methods; Statistical methods, description; Inductive and interpretive methods) and quantitative research methods (linear regression methods). Findings: The author has identified two independent variables that represent a capital structure that strongly affects the profitability of enterprises, including: (1) Short-term debt ratio (STD); (2) Long-term debt ratio (LTL). Research, practical and social implications: Based on the research results, the author offers several discussions and assessments on the critical role of adjusting the optimal capital structure for plastic and packaging companies, in addition to financial solution recommendations aimed at improving profitability for companies. Originality/value: Through a study of 30 plastic and packaging manufacturing companies, corresponding to 360 observations in the period of 2010 – 2021.