Factors affecting the capital structure of enterprises listed on the VietNamese Stock Market, 2022

THE STATE BANK OF VIETNAM - MINISTRY OF EDUCATION AND TRAINING

BANKING UNIVERSITY OF HO CHI MINH CITY

TRA THANH THANH

FACTORS AFFECTING

THE CAPITAL STRUCTURE OF ENTERPRISES LISTED ON THE VIETNAMESE

STOCK MARKET

GRADUATION THESIS

MAJOR: FINANCE AND BANKING

CODE: 52340201

ii

HO CHI MINH CITY, 2022

THE STATE BANK OF VIETNAM - MINISTRY OF EDUCATION AND TRAINING

BANKING UNIVERSITY OF HO CHI MINH CITY

TRA THANH THANH

FACTORS AFFECTING

THE CAPITAL STRUCTURE OF ENTERPRISES LISTED ON THE VIETNAMESE

STOCK MARKET

GRADUATION THESIS

MAJOR: FINANCE AND BANKING

CODE: 52340201

SUPERVISOR

ASSOCIATE PROFESSOR PH.D. DANG VAN DAN

ii

HO CHI MINH CITY, 2022

i

ABSTRACT

Author: Tra Thanh Thanh

Title: factors affecting the capital structure of enterprises listed on vietnam’s

stock market.

Language: English

Instructor: Associate professor Ph.D. Dang Van Dan

The course examines factors affecting the capital structure of enterprises listed

at HOSE and HNX in the period of 2012 -2021. Based on theories of capital larva and

experimental research, the thesis has formulated hypotheses and research models. The

research data was collected from the financial statements of 39 companies listed in

Vietnam. Using pooled OLS, FEM, REM and Driscoll & Kraay regression methods,

the thesis estimates the impact of factors on the debt ratio of the business. The results

of the regression show that there are 6 important factors affecting the capital structure

of businesses. The characteristics of the enterprise, the size of the company and the

turnover of assets are in a favorable relationship with the debt coefficient; The three

factors of tangible assets, growth rate and liquidity are inversely related to the debt

coefficient. Through research, the thesis course has suggested a number of

recommendations on capital structure for businesses..

Keywords:Influencing factors, capital structure, D&K method

ii

COMMITMENT

The author commits an honorary statement about your scientific thesis,

specifically as follows:

Full name of the author: Tra Thanh Thanh, HQ6 – GE06, Student ID:

030134180495

Currently a 4th year student majoring in Finance and Banking, Banking

University Ho Chi Minh City. While studying at Banking University Ho Chi Minh, the

author declares that the thesis: factors affecting the capital structure of enterprises

listed on the Vietnamese stock market.

Science supervisor: Associate professor Ph.D. Dang Van Dan

This thesis has never been submitted to any anywhere else before. The thesis is

the author's own research work. The research results are reliable, in which there are no

previously published contents or contents made by others except for cited sources fully

in the thesis.

Ho Chi Minh City, 2022

Author

Tra Thanh Thanh

iii

ACKNOWLEDGMENT

The author would like to thank the academic staff and support staff of Banking

University Of Ho Chi Minh City because of their dedicated teaching and support. It is

a great honor and pride for the author to become a student at Banking University Of

Ho Chi Minh City.

The author would like to express the deep gratitude to the Supervisor, Associate

professor Ph.D. Dang Van Dan, who whole heartedly supported, patiently guided and

encouraged the author during doing this thesis.

iv

CONTENT

ABSTRACT .................................................................................................................... i

COMMITMENT ............................................................................................................ ii

ACKNOWLEDGMENT ............................................................................................... iii

CONTENT..................................................................................................................... iv

LIST OF ABBREVIATIONS ...................................................................................... vii

LIST OF TABLEAND FIGURE................................................................................. viii

CHAPTER I. INTRODUCTION ....................................................................................1

1.1. Reasons for choosing the topic ..........................................................................1

1.2. Research objectives............................................................................................2

1.2.1. Overall research objectives.........................................................................2

1.2.2. Specific research objectives........................................................................2

1.3. Research question ..............................................................................................3

1.4. Research subject and scopes..............................................................................3

1.4.1. Research subjec ...........................................................................................3

1.4.2. Research scopes ..........................................................................................3

1.5. Research contribution ........................................................................................3

1.6. Research outline.................................................................................................4

CHAPTER II: LITERATURE REVIEW........................................................................5

2.1. Definitions..........................................................................................................5

2.1.1. Capital structure ..........................................................................................5

2.1.2. Optimum capital structure...........................................................................5

2.2. Theories about the capital structure of the business..........................................8

2.2.1. Miller and Modigliani theory......................................................................8

2.2.2. Static trade-off theory .................................................................................9

2.2.3. Dynamic trade-off theory..........................................................................10

2.2.4. Hierarchical order theory ..........................................................................11