Luận văn thạc sĩ UEH determinants of debt to equity ratio (financial leverage) vietnamese firms

1

UNIVERSITY OF ECONOMICS INSTITUTE OF SOCIAL STUDIES

HO CHI MINH CITY THE HAGUE

VIETNAM THE NETHERLANDS

VIETNAM - NETHERLANDS

PROGRAMME FOR M.A IN DEVELOPMENT ECONOMICS

DETERMINANTS OF DEBT-TO-EQUITY RATIO

(FINANCIAL LEVERAGE)-VIETNAMESE

FIRMS CASE STUDY

BY

NGUYEN THANH BIEN

MASTER OF ARTS IN DEVELOPMENT ECONOMICS

HO CHI MINH CITY, September 2012

LUAN VAN CHAT LUONG download : add [email protected]

2

UNIVERSITY OF ECONOMICS INSTITUTE OF SOCIAL STUDIES

HO CHI MINH CITY THE HAGUE

VIETNAM THE NETHERLANDS

VIETNAM - NETHERLANDS

PROGRAMME FOR M.A IN DEVELOPMENT ECONOMICS

DETERMINANTS OF DEBT-TO-EQUITY RATIO

(FINANCIAL LEVERAGE)-VIETNAMESE

FIRMS CASE STUDY

A thesis submitted in partial fulfilment of the requirements for the degree of

MASTER OF ARTS IN DEVELOPMENT ECONOMICS

By

NGUYEN THANH BIEN

Academic Supervisor:

LE ANH TUAN

HO CHI MINH CITY, September 2012

LUAN VAN CHAT LUONG download : add [email protected]

3

Table of Contents

List of Tables………………………………………………………………………......6

List of Figure………………………………………………………………………......7

Abstract……………………………………………………………………………......8

Chapter 1 Introduction……............................................................................................9

1.1 Problem Statement……………………………………………………...................9

1.2 Research Objectives………………………………………………………...........10

1.3 Research Questions………………………………………………………............11

1.4 Research Scope…………………………………………………………...............11

1.5 Research Contribution...........................................................................................12

1.6 Research Structure………………………………………………………..............12

Chapter 2 Literature Review........................................................................................13

2.1 Theoretical Review.................................................................................................13

2.1.1 Static Trade Off Theory......................................................................................13

2.1.2 Pecking Order Theory …....................................................................................15

2.1.3 Agency Cost Theory ….......................................................................................16

2.2 Empirical Studies..................................................................................................17

2.2.1 Bevan, A. and Danbolt, J., 2002..........................................................................17

2.2.2 Deesomsak, R., Paudyal, K., and Pescetto, G. (2004)........................................18

2.2.3 Buferna, F., Bangassa, K., and Hodgkinson, L. (2005)......................................19

2.2.4 Um, T. (2010), Capital structure determinants of Thai listed companies...........20

Chapter 3 Research Methodology................................................................................22

3.1 An Overview - Vietnamese Firm...........................................................................22

3.2 Conceptual Framework..........................................................................................23

3.2.1 Dependent Variable.............................................................................................23

3.2.2 Explanatory Variable...........................................................................................23

3.2.2.1 Tangibility of firm............................................................................................23

LUAN VAN CHAT LUONG download : add [email protected]

4

3.2.2.2 Size of firm.......................................................................................................24

3.2.2.3 Profitability of firm..........................................................................................24

3.2.2.4 Growth of firm..................................................................................................25

3.2.3 The Regression Model.........................................................................................25

3.3 Data Collection.......................................................................................................26

Chapter 4 Data Analysis..................................................................................28

4.1 Data Description.....................................................................................................28

4.1.1 Variable Descriptive Statistic..............................................................................28

4.1.2 Correlation Matrix ….........................................................................................29

4.2 Regression Result …..............................................................................................30

4.2.1 Fixed-effects and Random-effects Regression Result.........................................30

4.2.2 Hausman Test ….................................................................................................30

4.3 Regression Result Discussion................................................................................31

4.3.1 Regression Equation............................................................................................31

4.3.2 Coefficients Significance....................................................................................32

4.3.3 Coefficients Sign.................................................................................................32

4.3.4 Multicollinearity and Auto Correlation …..........................................................33

4.3.5 Heteroscedasticity …..........................................................................................34

4.3.6 Industrial Groups Effect......................................................................................34

4.3.7 Public and Private Firm Comparison …........................................................... 35

4.3.7.1 Financial Leverage Degree ….........................................................................35

4.3.7.2 Determinants of Financial Leverage................................................................35

Chapter 5 Conclusion and Recommendation....................................................37

5.1 Conclusion.............................................................................................................37

LUAN VAN CHAT LUONG download : add [email protected]