Financing Source, Investment Decision and Firm Performance of Small and Medium Enterprises (SMEs) : Evidence from Vietnam

Small and Medium Enterprises (SMEs) are an important part of the establishment of jobs and worldwide economic development in most economies. The result is the appropriate types of assets to invest in and funding sources in optimal returns for the organization, representing the company's strong success and future possibilities. The research aims to evaluate how finance sources and investment choices affect SMEs' performance in Vietnam. In this research, quantitative approaches are proposed to prove the hypotheses. All regression models were run using Stata software version 16.0 with a dataset of 2453 SMEs randomly selected in 10 provinces of Vietnam between 2011 and 2015. According to the conclusions of this report, investment decisions have a negative effect on firm performance. Debt tends to have a positive effect on the firm positive affective has the opposite effect. In addition, short-term debt appears to have a significant positive effect on the firm performance. The use of over-high financial leverage will negatively affect businesses. This research will help companies understand the role of investment decisions and financing in improving SMEs' performance in Vietnam