The objective of this article is to identify the determinants influencing the capital structure of
small and medium-sized enterprises (SMEs) in Vietnam. Empirical results show that SMEs
employ mostly short-term liabilities to finance their operations. A firm’s ownership also
affects the way a SME finances its operations. The capital structure of SMEs in Vietnam is
positively related to growth, business risk, firm size, networking, and relationships with
banks; but negatively related to tangibility. Profitability seems to have no significant impact
on the capital structure of Vietnamese SMEs. The strong impact of such determinants as firm
ownership, firm size, relationships with banks, and networking reflects the asymmetric
features of the fund mobilization process in a transitional economy like that of Vietnam.