Does Financial Leverage Fit Firm Performance During the COVID-19 Pandemic

Quoc Kim

OAI: oai:igi-global.com:309103 • DOI: 10.4018/IJABIM.309103

The paper aims to determine the effect of financial leverage on the performance of Vietnamese small and medium enterprises during the COVID-19 pandemic. Based on the agency theory and pecking order theory, combined with the quantitative method, the financial leverage and COVID-19 are statistically significant factors affecting the performance of small and medium enterprises in Vietnam. Significantly, the author emphasizes that financial leverage has a positive effect on the performance during the pandemic. Furthermore, there is the existence of homoscedasticity and no-autocorrelation in the model when using feasible general least squares. It confirms that the model estimation is unbiased and reliable.