The Impact of Financial Structure on Profitability: Empirical Evidence from Vietnam’s Construction Sector
The purpose of this study is to empirically investigate the impact of financial structure—the balance between a firm’s liabilities and equities—on profitability, based on a sample of listed construction companies in Vietnam. Following a literature review, the hypothesis that there is a positive rela...
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| Veröffentlicht in: | Asian economic and financial review 2020, Vol.10 (9), p.1028-1036 |
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| creator | Thi Nga, Pham Nguyen, Tristan |
| description | The purpose of this study is to empirically investigate the impact of financial structure—the balance between a firm’s liabilities and equities—on profitability, based on a sample of listed construction companies in Vietnam. Following a literature review, the hypothesis that there is a positive relationship between financial structure and profitability was formulated and tested through pooled ordinary least square, fixed effects, and random effects models. The empirical results revealed that the total, short-term, and long-term debt ratios exert a negative impact on profitability, while asset tangibility, inventory ratios, and growth rate, as well as size and age of firm all positively affect profitability; however, short-term receivable ratios had no effect. These findings contribute empirical evidence, in the context of emerging economies, to the existing body of literature. |
| doi_str_mv | 10.18488/journal.aefr.2020.109.1028.1036 |
| format | Article |
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| subjects | Bankruptcy Boards of directors Capital costs Cash flow Construction industry Debt financing Emerging markets Equity Financial leverage Funding Investments Long term debt Profitability Profits Rating services Stockholders |
| title | The Impact of Financial Structure on Profitability: Empirical Evidence from Vietnam’s Construction Sector |
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