Table A1

Empirical results on the relationship between leverage and firm performance

PaperPeriodScopeRelationshipExplanation
Mehmood et al. (2019) 2004–2017520 manufacturing firms from 4 countries in South Asia (Pakistan, India, Sri Lanka, Bangladesh)

  1. Mixed results, mostly negative with respective to different countries and 3 performance indicators (ROA, ROE, Tobin's Q)

Agency theory
Tran et al. (2017) 2010–2014130 joint stock companies in Hue, Vietnam

  1. Negative results between leverage and 3 measures of firm performance (ROA, ROE, EPS)

Trade-off theory and agency theory
Nguyen and Đang (2017) 2007–2014All listed companies on Ha Noi and Ho Chi Minh City stock exchange markets, Vietnam

  1. Negative result between leverage and ROA

Information asymmetry
Afza and Ahmed (2017) 2006–2013333 non-financial firms from PakistanDespite different business strategies:

  1. Negative results between leverage and ROA, ROE

  2. Positive results between leverage and Tobin's Q

Information asymmetry
Olajide et al. (2017) 1996–201460 listed firms from Nigeria

  1. Negative results between leverage and different performance measures (ROA, ROE, PE, Tobin's Q, performance index)

Agency theory
Vuong (2017) 2009–2015142 industrial commodity and service firms listed on Ha Noi and Ho Chi Minh City stock exchange markets, Vietnam

  1. Negative results between 3 debt ratios (total debts, long-term and short-term debts) and ROE

Pecking order theory
Vijayakumaran (2017) 2003–2010853 listed industrial firm in China

  1. Positive results between leverage and ROA, ROE

Agency theory
Vuong et al. (2017) 2006–2015739 very large and large listed firm in UK

  1. Negative results between long-term debts and ROA, ROE

  2. Insignificant results between short-term debts and ROA, ROE

  3. All positive results between 2 debt ratios (long-term and short-term debts) and Tobin's Q

  4. Impact of leverage on ROA, ROE is stronger than other indicators

Agency theory
Phan (2016) 2007–201395 manufacturing firms listed on Vietnam stock exchange markets

  1. Negative results between leverage and ROA, ROE despite different regression models

Trade-off theory and agency theory
Vo (2016) 2008–2014272 listed non-financial companies on Ha Noi stock exchange market

  1. Negative results between 3 debt ratios (total debts, long-term debts, short-term debts) and ROA, EPS

 
Avci (2016) 2003–2015110 manufacturing firms in Turkey

  1. Negative results between both long-term, short-term debt and ROA, ROE

 
Chadha and Sharma (2016) 2003–2013422 listed manufacturing firms in India

  1. Insignificant results between leverage and ROA, Tobin's Q

  2. Negative results between leverage and ROE

 
Hoang (2015) 2008–2012150 listed manufacturing firms in Vietnam

  1. Positive results between total debt, short-term debt and Tobin's Q

  2. Insignificant between long-term debt and Tobin's Q

Agency theory
Jiahui (2015) Before 2013367 listed SMEs in China

  1. Negative results between leverage and ROE

Pecking order theory
Fosu (2013) 1998–2009257 firms in South Africa

  1. All positive results between three different debt ratios and ROA

 

Source(s): Author's summary (2019)

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