The effects of corporate strategy and capital structure on firm performance: Evidence from Canada

The corporate strategy and capital structure decisions are important because of the need to maximize shareholders’ wealth, and because of the impact such decisions have on the firm's ability to deal with its competitive environment. The purpose of this study is to test the relationships between corporate strategy, capital structure, and firm performance. This study also seeks to extend the findings of Su and Vo (2010). A sample of 91 Canadian manufacturing firms listed on Toronto Stock Exchange (TSX) for a period of 3 years (from 2008–2010) was selected. This study applied co-relational and non-experimental research design. The findings show that both the corporate strategy and capital structure effect the performance of Canadian manufacturing firms. This study contributes to the literature on the factors that affect firm performance. The findings may be useful for the financial managers, investors, and financial management consultants.