ABSTRACT: This study analyzes the factors affecting the financial leverage of 178 non-financial firms listed on the Ho Chi Minh City Stock Exchange (HOSE) and the Hanoi Stock Exchange (HNX) during the period from 2018 to 2022. The research uses STATA software to conduct panel data analysis through regression models such as OLS, FEM, REM and finally FGLS using R software to overcome defects in the model. Research results show that the factors: Return on assets ratio (ROA), fixed asset ratio (FAR), liquidity ratio (LR), firm size (FS) and non-debt tax shield (NDTS) negatively affect financial leverage. In contrast, firm age (FA) has a positive effect. Consequently, the authors make some recommendations for business managers to increase the effectiveness of using financial leverage.

KEYWORDS – Capital structure, non-financial firms, financial leverage, FGLS