Covid-19 pandemic, Financial leverage and Firm growth: The case of listed firms in Vietnam

Abstract

The Covid-19 pandemic creates difficulties for companies’ operating and investing activities,
especially capital difficulties. Accordingly, our research objective is to analyze the moderating role of the
Covid-19 pandemic on the impact of financial leverage on firm growth. We used the quantitative research
method with a sample of 471 listed companies in Vietnam in the period 2015-2021, and the PCSE model is
the last choice. It showed that firm growth is positively influenced by financial leverage and negatively by
the Covid-19 pandemic. In addition, the impact of financial leverage on company growth has become even
stronger in the context of the Covid-19 pandemic. This estimation result not only contributes to confirming
the necessity of using financial leverage, but also encourages the important supporting role of commercial
banks to maintain and increase growth opportunities for companies during difficult times due to the impact
of the epidemic.