Growing Science » Management Science Letters » Determinants of profitability: evidence from construction companies listed on Vietnam Securities Market

Journals


MSL Volumes


Management Science Letters

ISSN 1923-9343 (Online) - ISSN 1923-9335 (Print)
Quarterly Publication
Volume 10 Issue 3 pp. 523-530 , 2020

Determinants of profitability: evidence from construction companies listed on Vietnam Securities Market Pages 523-530 Right click to download the paper Download PDF

Authors: Thi Nhu Le, Van Anh Mai, Van Cong Nguyen

DOI: 10.5267/j.msl.2019.9.028

Keywords: Profitability, Listed construction companies, Return on assets, Return on equity, Vietnam stock exchange

Abstract: The profitability of businesses is influenced by many different factors such as financial structure, financial leverage, size and age of enterprises, business characteristics, etc. Therefore, the determination of the factors influencing on the trend of the profitability of enterprises is an essential and important basis for managers to provide useful solutions to improve performance measurement. This study was conducted based on data collected from 73 listed construction companies in Vietnam for the period 2008-2015 with 584 observations and using quantitative methods in combination with the FEM regression model through Hausman test with the help of Stata software 14.0. The research results show that: (1) The age of the company (AGE) and debt ratio (TD) negatively affect the profitability (2) Growth rate (GROW) and asset utilization performance (TURN) have positive impacts on profitability (3) Company size (SIZE) has a positive impact on profitability, and (4) The proportion of fixed assets in total assets (TANG) maintains an opposite effect on profitability although the effect is not clear. Based on the research results, the authors have provided a number of specific recommendations and solutions to improve the profitability of the construction companies listed on the Vietnam Stock Exchange.

How to cite this paper
Le, T., Mai, V & Nguyen, V. (2020). Determinants of profitability: evidence from construction companies listed on Vietnam Securities Market.Management Science Letters , 10(3), 523-530.

Refrences
Abor, J. (2005). The effect of capital structure on profitability: an empirical analysis of listed firms in Ghana. The Journal of Risk Finance, 6(5), 438-445.
Akintoye, I. (2008). Optimizing Investment Decisions through informative Accounting. Akintoye, 3(7), 178-191..
Bērzkalne, I. (2014). The Relationship between Capital Structure and Profitability: Causality and Characteristics. The Business Review Cambridge, 22(1), 159-166.
Dawar, V. (2014). Agency theory, capital structure and firm performance: some Indian evidence. Managerial Finance, 12(40), 1190-1206.
Doan, N. P. (2014). Impact of capital structure on business performance of enterprises after listing in Vietnam. Journal of World Economy and Politics, 7(219), 72-80.
Ebaid, I. E. (2009). The impact of capital-structure choice on firm performance: empirical evidence from Egypt. The Journal of Risk Finance, 10(5), 477-487.
Frank, M., & Goyal, V. (2003). Testing the pecking order theory of capital structure. Journal of Financial Economics, 67, 217-248.
Gill, A., Biger, N., & Mathur, N. (2011), The effect of capital structure on profitability: Evidence from the United States. International Journal of Management, 4(28), 3-15.
Hanoi Stock Exchange. (2018, 9 25). thong-tin-cong-bo-ny-tcph. Available at: https://www.hnx.vn/thong-tin-cong-bo-ny-tcph.html
HoChiMinh Stock Exchange. (2018, 9 12). hsx.vn/Areas/Desktop/Web/AnnualReportView? Visited from https://www.hsx.vn/Areas/Desktop/Web/AnnualReportView?fid=53b3300db569458d93ae9899e2c87d08
Javed, T., Younas, W., & Imran, M. (2014). Impact of capital structure on firm performance evidence from Pakistani firms. International Journal of Academic Research in Economics and Management Science, 5(3), 28-52.
Khan, A. G. (2012). The relationship of capital structure decisions with firm performane: A study of the engineering sector of Pakistan. International Journal of Accounting and Finanial Reporting, 1(2), 245-262.
Ministry of Finance. (2019, 7 15). Report the state budget to citizens.
Modigliani, F., & Miller, M. (1958). The cost of capital, corporation finance and the theory of investment. The American Economic Review, 3(48), 261-280.
Modigliani, F., & Miller, M. (1963). Corporate income taxes and the cost of capital: acorrection. American Economic Review, 53, 443-453.
Muritala, T. A. ( 2012). An empirical analysis of capital structure on firms’ performance in Nigeria. International Journal of Advances in Management and Economics, 5(1), 116-124.
Onaolapo, A. A., & Kajola, S.O. (2010). Capital structure and firm performance: Evidence from Nigeria. Uropean Jounal of Economic, Finance and Administrative Sciences, 25, 70-82.
Phong, T. (2018, 4 27). Construction industry - the journey of 60 years of development. Retrieved from http://www.baoxaydung.com.vn/news/vn/thoi-su/nganh-xay-dung-hanh-trinh-60-nam-phat-trien.html
Pouraghajan, A., Malekian, E., & Emamgholipour, M. (2012). The relationship between capital structure and firm performance evaluation measures: Evidence from the Tehran Stock Exchange. International Journal of Business and Commerce, 9(1), 166-181.
Salim, M., & Yadaw, R. (2012). Capital structure and firm performance: Evidence from Malaysia Listed companies. Procedia- Social and Behavioral Sciences, 65, 156-166.
Sheikh, N. A., & Wang, Z. (2013). The impact of capital structrure on performance: An empirical study of non - financial listed firms in Pakistan. International Journal of Comerce and Management, 4(23), 354-368.
Shepherd, R.W. (1971). Theory of cost and production functions. The journal of Economic History, 3(31), 721-723.
Shubita, M. F., & Alsawalhah, J. M. (2012). The relationship between capital and profitability. International Journal of Business and Social Science, 16(3), 104-112.
State Securities Commission of Vietnam. (2018, 8 14). company_listed_companies? Available at: http://ssc.gov.vn/ssc/faces/en/enmenu/enpages_compdatabase/company_listed_companies?&_afrLoop=58134931108875902&_afrWindowMode=0&_afrWindowId=null#%40%3F_afrWindowId%3Dnull%26_afrLoop%3D
Stinchcombe, A.L., & March, J. G. (1965). Social structure and organizations. Handbook of organizations, 142-193.
Zeitun, R., & Tian, G.G. (2007). Capital structure and corporate performance: evidence from Jordan. Australian Accounting Business and Financial Journal, 4(1), 40-60.

Journal: Management Science Letters | Year: 2020 | Volume: 10 | Issue: 3 | Views: 3941 | Reviews: 0

Related Articles:

Add Reviews

Name:*
E-Mail:
Review:
Bold Italic Underline Strike | Align left Center Align right | Insert smilies Insert link URLInsert protected URL Select color | Add Hidden Text Insert Quote Convert selected text from selection to Cyrillic (Russian) alphabet Insert spoiler
Security Code: *

® 2010-2024 GrowingScience.Com