Factors Affecting the Capital Structure of Companies in the
Industry, Agriculture, and Services Listed on the Vietnamese
Stock Market
Do Thi Kim Tien
National Academy of Public Administration, Hanoi, Vietnam
https://doi.org/10.47191/jefms/v6-i8-62ABSTRACT:
The study collects data from 75 industrial, agricultural, and service companies listed on the two stock exchanges HOSE and HNX in the period from 2020 to 2023. At the same time, the study uses Hausman and Breusch, and Pagan Lagrangian multiplier tests to select the model that best explains the factors affecting capital structure. The research results show that corporate income tax rate and revenue growth rate have a positive impact on the debt ratio, while the profitability ratio and operating risk of the company are negatively correlated with the debt ratio. Other factors such as tangible assets and company size have an impact on the choice of a firm's capital structure but are not statistically significant.
KEYWORDS:
capital structure, industry, agriculture and services, stock market.
REFERENCES:
1) Le Tham Duong, Bui Dan Thanh, Le Thi Han (2020), Factors affecting the capital structure of food industry enterprises on the Vietnamese stock market, Financial Review, March 2, 2020.2) Le Quang Dinh (2022), Factors affecting the capital structure of wholesale enterprises on the Vietnamese stock market, Financial Review, 1st August 2022.
3) Khaki, A. R., & Akin, A. (2020). Factors affecting the capital structure: New evidence from GCC countries. Journal of International Studies, 13(1), 9-27.
4) Hoang Thi Kim Thoa. (2021). Factors affecting the capital structure of joint stock companies in the real estate industry listed on the Vietnam Stock Exchange. Journal of Economic and Management Science, University of Economics, Hue University, (18).
5) Ahmad, N., Salman, A., & Shamsi, A. F. (2015). Impact of financial leverage on firms' profitability: An investigation from the cement sector of Pakistan. Research Journal of Finance and Accounting, 6(7), 75-80.
6) Alghusin, N. A. S. (2015). Do financial leverage, growth, and size affect the profitability of the Jordanian industrial firms listed? International Journal of Academic Research in Business and Social Sciences, 5(4), 335-348.
7) Cophieu68. (2018). Industry financial growth. Retrieved October 20, 2017, from Stocks 68 website: http://www.cophieu68.vn/categorylist.php?o=cm&ud=
8) Dang, Q. T., & Quach, Y. T. H. (2014). Factors affecting the capital structure of enterprises listed on the Ho Chi Minh City Stock Exchange (HOSE) [Factors affect the capital structure of businesses listed on the Ho Chi Minh City Stock Exchange (HOSE)]. Journal of Development & Integration, 18(28), 34-39.
9) Do, L. T. (2018). Research on factors affecting the financial structure of the business [Research on factors affecting the financial structure of the business]. Retrieved October 25, 2017, from http://vaa.net.vn/nghien-cuu-cac-nhan-to-anh-huong-den-cau-truc-tai-chinh-cua-doanh-nghiep/
10) 10. Harc, M. (2015). The relationship between tangible assets and capital structure of small and medium-sized companies in Croatia. Ekonomski Vjesnik, 28(1), 213-224.
11) Kraus, A., & Litzenberger, R. H. (1973). A state-preference model of optimal financial leverage. The Journal of Finance, 28(4), 911-922.
12) Le, N. T. M. (2016). Factors affecting capital structure: A study in the cement industry in Vietnam [Factors affecting capital structure: A study in the cement industry in Vietnam]. Van Hien University Journal of Science, 4(3), 30-37.
13) Le, P. T. (2017). Effect of ownership structure on the performance of a listed company [Ownership structure impact on the performance of a listed company]. Retrieved October 27, 2017, from http://tapchitaichinh.vn/nghien-cuu--trao-doi/trao-doi-binh-luan/nhan-to-anh-huong-toi-cau-truc-von-cua-cac-cong-ty-nganh-xay-dung-niem-yet-tren-san-8
14) Le, P. T. M. (2014). Factors affecting the capital structure of construction companies listed on the stock exchange [Factors affecting capital structure of construction companies listed on the stock exchange]. Financial Review, 8, 23-30.
15) Marete, D. (2015). The relationship between firm size and financial leverage of firms listed at Nairobi securities exchange (Doctoral dissertation, University of Nairobi, Kenya).
16) Modigliani, F., & Miller, M. H. (1958). The cost of capital, corporation finance, and the theory of investment. The American Economic Review, 48(3), 261-297.
17) Modigliani, F., & Miller, M. H. (1963). Corporate income taxes and the cost of capital: A correction. The American Economic Review, 53(3), 433-443.
18) Nguyen, C. T. (2011). Factors affecting the capital structure of Vietnamese seafood processing enterprises [Factors affecting capital structure of Vietnamese seafood processing enterprises]. Journal of Science and Technology Development, 14(1), 28-54.
19) Nguyen, D. T. T., Diaz-Rainey, I., & Gregoriou, A. (2012). Financial development and the determinants of capital structure in Vietnam. Retrieved October 5, 2017, from http://www.nzfc.ac.nz/archives/ 2013/papers/updated/46.pdf
20) Nguyen, H. T. T. (2017). Factors affecting financial leverage of Vietnam Travel Companies [Factors affect the financial leverage of Vietnam Travel Companies]. Journal of Science - Hue University, 126(5A), 5-17
21) Nguyen, K. T. D., & Ramachandran, N. (2006). Capital structure in small and medium-sized enterprises: The case of Vietnam. ASEAN Economic Bulletin, 23(2), 192-211.
22) Pham, L. T. D. (2017). Factors affecting the capital structure of state-owned enterprises after equitization in the integration period. Retrieved May 5, 2017.
