THE IMPACT OF CAPITAL STRUCTURE AND OWNERSHIP ON THE PERFORMANCE OF STATE ENTERPRISES AFTER EQUITIZATION: EVIDENCE FROM VIETNAM

2021 ◽  
pp. 2150007
Author(s):  
NGUYEN DUY SUU ◽  
HO THUY TIEN ◽  
WING-KEUNG WONG
Keyword(s):  
Capital Structure ◽  
Negative Impact ◽  
Positive Impact ◽  
State Ownership ◽  
Stock Exchanges ◽  
Tobin’S Q ◽  
Tobin's Q ◽  
Equity Ratio ◽  
Capital Ownership ◽  
The Impact

The main objective of this paper is to study the impact of capital structure and capital ownership form of SOEs after equitization. We have considered all 137 state-owned companies after equitization for which data can be collected during the period from 2007 to 2017. These encompass companies in different industries listed on the HOSE (Ho Chi Minh City) and HNX (Hanoi) stock exchanges. To this end, we have applied REM and FEM models and corrected for variance with the GLS and FEM models. Our findings reveal that the variable leverage (LEV) has a negative impact on ROA, but, interestingly, has a positive impact on ROE and Tobin’s Q. Growth rate (GROWTH) have a positive effect on both ROA and Tobin’s Q. State ownership (SO) has only positive impact on ROA. Meanwhile, the company size variable (SIZE) has a positive impact on Tobin’s Q. In addition, in relation to our examination of how the domestic and foreign resources might impact on the profitability ratio, we have observed that the domestic equity ratio has a positive impact on both ROA and ROE whereas the foreign ownership ratio has a negative impact on both ROA and ROE.

Differential impact of advertising and distribution expenditure on Tobin's Q

2009 ◽  
Vol 1 (2/3) ◽  
pp. 77-94 ◽  
Author(s):  
Arvind Sahay ◽  
Anandan Pillai
Keyword(s):  
Corporate Branding ◽  
Negative Impact ◽  
Positive Impact ◽  
Tobin’S Q ◽  
Advertising Expenditure ◽  
Time Series Regression ◽  
Tobin's Q ◽  
Content Type ◽  
Marketing Expenditures ◽  
The Impact

PurposeThe purpose of this paper is to understand the impact of components of marketing expenditures, i.e. advertising and distribution expenditures on intangible value of firm (measured in terms of Tobin's Q). The relationship is studied in the context of branding approaches (corporate and house of brands) that various firms follow.Design/methodology/approachThe data are collected from databases of Centre for Monitoring Indian Economy (CMIE) and from the web site of National Stock Exchange. Time series regression is performed using SPSS software to test the model.FindingsAdvertising expenditure has a positive impact on the intangible value of the firm and this relationship is stronger for firms following corporate branding than for firms that follow house of brands strategy. Distribution expenditure has negative impact on the intangible value of the firm and this relationship is stronger for firms following corporate branding than for firms that follow house of brands strategy.Research limitations/implicationsSince most of the data retrieved for the analysis were of B2B (business to business) firms, the findings may not be generalized for all firms.Practical implicationsAdvertising expenditure has a diminishing marginal utility in creating intangible value. It would be useful for firms to understand where they are on this continuum and whether their advertising expenditure is giving adequate returns or may be better spent elsewhere.Originality/valueIn the literature, researchers have expressed mixed viewpoints regarding the impact of total marketing spend on intangible value. The marketing expenditures are found to have both positive and negative impact on intangible value, with respect to various contexts. However, the impact of major components of marketing expenditures is not addressed. This gap is addressed in this research paper.

scholarly journals The Impact of Capital Structure on the Profitability of Publicly Traded Manufacturing Firms in Bangladesh

2019 ◽  
Vol 6 (2) ◽  
pp. 1 ◽  
Author(s):  
Md. Ataur Rahman ◽  
Md. Sadrul Islam Sarker ◽  
Md. Joyen Uddin
Keyword(s):  
Capital Structure ◽  
Negative Impact ◽  
Positive Impact ◽  
Manufacturing Firms ◽  
Debt Ratio ◽  
Manufacturing Companies ◽  
Publicly Traded ◽  
Significant Negative Impact ◽  
Equity Ratio ◽  
The Impact

This research explores the impact of capital structure on the profitability of publicly traded manufacturing firms in Bangladesh. In this paper, we applied the fixed effect regression to find out the correlation among independent variables (debt ratio, equity ratio and debt to equity ratio) and dependent variables (return on asset, return on equity and earnings per share). A sample of 50 observations of selected 10 manufacturing companies listed in Dhaka Stock Exchange has been analyzed over the period of 2013 to 2017. This research reveals that the debt ratio and equity ratio have a significant positive impact but debt to equity ratio has a significant negative impact on ROA. This paper also exposes that, equity ratio has a significant positive impact but debt to equity ratio has a significant negative impact on ROE. Finally, debt and equity ratio has a significant negative impact on EPS. Findings of this research will help the listed manufacturing companies to maintain an optimum capital structure which will lead to the maximization of stockholders wealth.

scholarly journals Analisis Dampak Struktur Modal Terhadap Profitabilitas

2018 ◽  
Vol 1 (1) ◽  
Author(s):  
Dwi Setiarini ◽  
Sujiono Sujiono ◽  
Hadi Sumarsono
Keyword(s):  
Capital Structure ◽  
Negative Impact ◽  
Secondary Data ◽  
T Test ◽  
Return On Assets ◽  
Credit Cooperatives ◽  
Equity Ratio ◽  
Data Source ◽  
The Impact ◽  
The Capital Structure

Funding is an important issue that is taken into account by the company, both for the establishment and expansion of the business. Capital structure has an impact on profitability, with the improvement in capital structure, the company gives profits. The purpose of this study was to determine the impact of the capital structure measured by Debt to Equity Ratio (DER) on profitability as measured by Return on Assets (ROA) partially in Sharia Savings and Credit Cooperatives Cooperatives or KSK Komment Year 2016 - 2019. This researcher uses regression analysis simple linear and t test. The data source used in this study is secondary data. The results of the study concluded that the capital structure measured by Debt to Equity Ratio (DER) partially had a negative impact on Return on Assets (ROA). While the t test on the variable Debt to Equity Ratio (DER) partially proved to have no significant impact on Return on Assets (ROA).

scholarly journals The Capital Structure and It’s Impact on the Profitability of the FMCG Companies in India – A Study

2021 ◽  
Vol 04 (10) ◽  
Author(s):  
Dr. Amalesh Patra ◽  
Keyword(s):  
Capital Structure ◽  
Negative Impact ◽  
Positive Impact ◽  
Stock Exchange ◽  
Book Value ◽  
Coverage Ratio ◽  
Total Debt ◽  
Lm Test ◽  
The Impact ◽  
The Capital Structure

The purpose of this study is to examine the impact of the capital structure on the profitability of the companies under the FMCG sector listed in the National Stock Exchange (NSE) of India. The sample of 10 companies over 14 years from 2007 to 2020 is considered in this study. To examine the impact of capital structure on the profitability, Total Debt to Total Assets (TDTA) Debt- Equity (DE), Interest Coverage Ratio (ICR) consider as the independent variables, Price to Book Value Ratio (PBVR) and Growth (GROW) considered as the control variables and Return on Capital Employed (ROCE) considered as dependent variable (profitability). To fulfil the objective of the study Pearsons' Correlation has been conducted for testing the Collinearity, Shapiro- Wilk test has been run for normality test of the variables, to test the Stationary Hadri LM test, Kao and Pedroni test for cointegration test and to choose the appropriate model Hausman test and finally, for the result, I run Fixed Effect Model. The result of the Regression analysis showed that Total Debt to Total Assets (TDTA), Debt- Equity (DE), Interest Coverage Ratio (ICR), and Price to Book Value are the factors that have an impact on the Profitability (ROCE) of the company. The empirical result also suggests that total debt to Total Assets (TDTA), Interest Coverage Ratio (ICR), and Price to Book Value of the company have a positive impact but Debt -Equity has a negative impact on the ROCE

Effect of Financial Leverage on Firm's Market Value Creation in Bangladesh

2017 ◽  
Vol 4 (2) ◽  
pp. 41-58
Author(s):  
Syed Md. Khaled Rahman
Keyword(s):  
Value Creation ◽  
Tobin’S Q ◽  
Financial Leverage ◽  
Tobin's Q ◽  
Book Value ◽  
Explanatory Variables ◽  
Basic Objective ◽  
Equity Ratio ◽  
The Impact ◽  
Domestic Companies

This article contends that a firm's performance is affected by various factors and capital structure is one of the factors among them. The basic objective of the research is to analyze and compare the impact of financial leverage on firms' Market to Book Value (MV/BV) and Tobin's Q ratio of DSE-listed MNCs & domestic firms of Bangladesh over a 20-year period (1996-2015). Explained variables are Market to Book Value (MV/BV) and Tobin's Q ratio. Explanatory variables of the interest are indicators of six financial leverage ratios. MV/BV is negatively related with leverage ratios of both types of companies. Domestic companies' MV/BV decreases by 0.016 times for 1% increase of debt ratio while MNCs' MV/BV decreases by 0.048 times for 1% increase of debt-equity ratio and vice-versa. With debt-equity ratio, domestic companies' Tobin's Q is positively related while that of MNCs is negatively related.

Anti-Corruption Campaign and Firm Financial Performance: Evidence From Vietnam Firms

2022 ◽  
pp. 0193841X2110727
Author(s):  
Khanh Hoang ◽  
Hieu T. Doan ◽  
Thanh T. Tran ◽  
Thang X. Nguyen ◽  
Anh Q. Le
Keyword(s):  
Negative Impact ◽  
Positive Impact ◽  
Steering Committee ◽  
State Ownership ◽  
Private Firms ◽  
Online Newspapers ◽  
Firm Financial Performance ◽  
Business Operations ◽  
Corruption Index ◽  
The Impact

Background Corruption affects businesses in various ways. Anti-corruption, on the other hand, can improve the institutions of the country as well as business operations. Vietnam, as a socialist-oriented country with an ongoing high-profile anti-corruption campaign, provides us a unique setting to evaluate the impacts of anti-corruption on corporate performance. Objectives We address two questions: (1) what is the effect of anti-corruption on the performance of private-owned firms in Vietnam? and (2) how does anti-corruption influence the performance of firms with state ownership (FSOs) in Vietnam? Research design To investigate the impact of anti-corruption on performance of firms with different ownership settings, we use the establishment of the Central Anti-Corruption Steering Committee of Vietnam as a quasi-natural experiment for difference-in-differences analysis. We generate treatment effects of private holding and the state block ownership. To validate the findings, we construct a novel news-based anti-corruption index from Vietnamese online newspapers and use it in a robustness test to evaluate anti-corruption’s impacts on firm performance. Results and Conclusions We find a positive impact of the anti-corruption campaign on private firms’ performance, supporting the social norm perspective of how corruption affects businesses. The empirical results indicate a negative impact of the campaign on FSOs’ performance. The findings suggest that anti-corruption benefits private firms via improving the institutional quality of the country while improving the financial transparency of FSOs. Our study provides a method for measuring anti-corruption which is virtually unobservable and absent in the literature. The findings have implications for policymaking in contemporary Vietnam.

scholarly journals Ownership structure and corporate diversification decision: a study of Vietnamese listed firms

2016 ◽  
Vol 13 (3) ◽  
pp. 226-233 ◽  
Author(s):  
Duc Nam Phung ◽  
Thi Bich Nguyet Phan ◽  
Thi Lien Hoa Nguyen ◽  
Thi Phuong Vy Le
Keyword(s):  
Ownership Structure ◽  
Negative Impact ◽  
Positive Impact ◽  
Emerging Market ◽  
Foreign Ownership ◽  
State Ownership ◽  
Corporate Diversification ◽  
Diversification Strategy ◽  
Listed Firms ◽  
The Impact

This research examines the impact of the ownership structure on corporate diversification decision of listed firms in Vietnam over the period of 2007 and 2012. The empirical results from logit model show that while state ownership has positive impact on corporate diversification decisions of the firms, foreign ownership has negative impact on corporate diversification decision of the firms. This implies that government ownership tends to encourage corporate diversification strategy, while foreign ownership may plays monitoring role and discourage corporate diversification strategy in emerging market context.

scholarly journals Relationship Between Capital Structure and Stock Returns of Jordanian Commercial Banks

2020 ◽  
Vol 13 (2) ◽  
pp. 100
Author(s):  
Sufian Radwan Al-Manaseer
Keyword(s):  
Capital Structure ◽  
Stock Returns ◽  
Firm Size ◽  
Commercial Banks ◽  
Negative Impact ◽  
Positive Impact ◽  
Stock Exchange ◽  
Linear Regression Analysis ◽  
The Impact ◽  
The Relationship

This study aims to analyze the relationship between capital structure and stock returns of Jordanian banks listed on the Amman Stock Exchange from 2009 to 2018. The study sample is composed of 13 commercial banks in Jordan. The e-views program is used to conduct the statistical analysis of study variables. Initially, a simple linear regression analysis is conducted to determine the impact of capital structure as measured by financial leverage on stock returns and vice versa. Then, several control variables are added: growth in assets, liquidity, firm size, and profitability. This study has found that growth, capital structure, and profitability have a positive impact on stock returns. By contrast, liquidity and firm size have a negative impact on stock returns. Stock returns and firm size have a positive impact on capital structure, whereas liquidity, growth, and profitability have a negative impact on capital structure.

scholarly journals ANALYSIS OF CAPITAL STRUCTURE AND FINANCIAL PERFORMANCE IN THE JORDANIAN INSURANCE SECTOR

2020 ◽  
Vol 8 (3) ◽  
pp. 1310-1320
Author(s):  
Zelhuda Shamsuddin ◽  
Al Majali Muhammad Ahmad Kamel ◽  
Wan Mohd Nazri Wan Daud ◽  
Wan Sallha Yusoff
Keyword(s):  
Capital Structure ◽  
Financial Performance ◽  
Insurance Companies ◽  
Tobin’S Q ◽  
Short Term ◽  
Equity Financing ◽  
Tobin's Q ◽  
Return On Equity ◽  
Insurance Firms ◽  
The Impact

Purpose of the study: This paper aims to examine the impact of capital structure and financial performance of listed insurance companies in Jordon. Methodology: This study used secondary data that was collected from Amman stock exchange and annual report of the selected insurance companies from the year 2007-2017. The static panel data analysis technique is used to examine the impact of capital structure on firm’s performance. The capital structure is measured using short-term debt, long-term debt, and equity financing. Whereas financial performance is measured using Return on Asset (ROA), Return on equity (ROE), and Tobin’s Q. Main Findings: The study findings suggest that capital structure influence the profitability of the listed insurance firms in Jordan. The results also reveal a significantly positive relation between long-term debt to total assets to profitability indicators, namely, return on assets (ROA), return on equity (ROE) and Tobin’s Q. On the other hand, the results also reveal a short-term debt has a significant positive relationship with return on equity (ROE) and returns on assets (ROA). However, a relationship between short-term debt and Tobin’s Q is not statistically significant. Applications of this study: The result of this study may assist the insurance sector in Jordon in making decisions regarding capital structure, which is to significantly rely on equity financing or debt financing to reduce financing risk such as agency cost that borne by the equity holders of the Jordanian insurance firms. Novelty/Originality of this study: The study noted that insurance firms generally play a crucial role in the economic development of every country. This study provides evidence that Jordanian insurance firms need to diversify their sources of financing and not rely significantly on debt financing, as the results prove that equity financing is a profitable source of financing.

scholarly journals Does capital structure affect firm value in Vietnam?

2021 ◽  
Vol 18 (1) ◽  
pp. 33-41
Author(s):  
Tien Dat Dang ◽  
Thi Van Trang Do
Keyword(s):  
Capital Structure ◽  
Firm Value ◽  
Positive Impact ◽  
Stock Exchanges ◽  
Enterprise Value ◽  
Control Factors ◽  
Beverage Industry ◽  
Food And Beverage ◽  
Negative Effect ◽  
The Impact

This study aims to examine whether the capital structure and several factors have significant influences on firm value in Vietnam. To achieve this objective, 435 non-financial listed companies have been selected from 2012 to 2019 on Vietnamese stock exchanges. Four groups of firms continue to be chosen from the total to investigate the differences in the outcomes among industries. The results altogether using the GMM method show that the impact of capital structure and other control variables on firm value is significant, yet different across industries: capital structure has a significant positive impact on firm value in the food and beverage industry, but has a significant negative effect on the value of the firm in wholesale trade and construction, as well as real estate industry, while has an insignificant influence on enterprise value considering all industries. Apart from the firm size, the impact of other control factors on firm value also indicates mixed results.

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