tiểu luận kinh tế lượng factors affecting the capital structure of food companies listed on ho chi minh stock exchange

FOREIGN TRADE UNIVERSITY FACULTY OF INTERNATIONAL ECONOMICS GROUP ASSIGNMENT – FINANCIAL ECONOMETRICS FACTORS AFFECTING THE CAPITAL STRUCTURE OF FOOD COMPANIES LISTED ON HO CHI MINH STOCK EXCHANGE Class: KTEE310.1 Lecturer: Ms Nguyen Thuy Quynh Members: Vũ Ngọc Quỳnh - 1813340057 Phạm Mai Dương - 1813340015 Phạm Thị Vân Anh - 1613340005 Hanoi 12/2019 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com TABLE OF CONTENTS ABSTRACT INTRODUCTION Rationale for the study Research questions and objectives Research subject and scope .7 Research methodology .7 The structure of report SECTION 1: OVERVIEW OF THE TOPIC .9 1.1 Overview about the capital structure 1.1.1 Definition of capital structure 1.1.2 The roles of capital structure 1.2 The capital structure theories 10 1.2.1 Modigliani and Miller (M&M) theory 10 1.2.2 Agency cost theory 10 1.2.3 Trade-off theory 11 1.2.4 Pecking-order theories 12 1.3 Determinants of capital structures 13 1.3.1 Firm size 13 1.3.2 Growth opportunities 14 1.3.3 Profitability 15 1.3.4 Tangible fixed assets 15 1.3.5 Tax rate 16 1.3.6 Industry characteristics 16 SECTION 2: MODEL SPECIFICATION 17 2.1 Data collection 17 2.2 Data analysis .17 2.2.1 The dependent variables 17 2.2.2 The independent variables 17 3.3 Building the research model 21 3.4 Describe the data 22 3.4.1 Descriptive statistics 22 3.4.2 Correlation matrix 25 SECTION 3: FINDINGS AND RESULTS 27 3.1 Estimated models .27 3.1.1 OLS regression .27 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com 3.1.2 REM and FEM regression 27 3.2 Testing the model’s defect .30 3.2.1 Heteroskedasticity test 30 3.2.2 VIF Test 30 3.3 Discussion on the estimated model 31 3.3.1 Profitability 31 3.3.2 Firm size 32 3.3.3 Tangible fixed assets .32 3.3.4 Growth opportunities .33 3.3.5 Corporate tax rate 34 3.3.6 Firm characteristics 35 3.4 Recommendations 35 3.4.1 Recommendations for the companies 35 3.4.2 Recommendations for the Government 37 REFERENCES .39 INDIVIDUAL ASSESSMENT 41 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com ABSTRACT Capital structure is a financial concept that reflects the ratio between the loan and the equity that the firm uses Determining an optimal capital structure is important in business operations Since the optimal capital structure will help businesses minimize their weighted average cost of capital (WACC), thereby it can maximize the value of their assets In addition, the capital structure affects the profitability and business risk that the business may face Therefore, choosing a capital structure between the loan and equity plays a crucial role in financial management In fact, the capital structure will vary depending on the characteristics of each business enterprise, the sector in which it operates, and the effects of macroeconomic fluctuations, cultural factors and religion Rather than finding out what percentage of equity is optimal, financial researchers are often interested in finding out what factors influence the decision to use the loan or financial leverage of the firm It is from the correlation between these factors and the capital structure that we can evaluate whether the decision to use the loan or the equity of the business is reasonable or unreasonable Regardingly, the purpose of this paper is to examine the factors affecting the capital structure of the food companies listed on Ho Chi Minh stock exchange Accordingly, data collection is conducted among 10 firms listed on HOSE The research findings revealed that the factors influencing on capital structure on these firms include tangible fixed assets, firm size, profitability, growth opportunity and liquidity In specific, tangible fixed assets have the strongest impact and firm size has the weakest impact Based on that, the paper also proposes some recommendation and suggestion to enhance the capital structure of these firms LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com INTRODUCTION Rationale for the study Firms make their decisions to get the most out of the proportion they are using of their capital How to structure capital is the very first question that financial managers ask themselves before getting into any financial activity Capital structure is not only concerned with discovering the right class of finance, but it is more than that; it focuses on the optimal mix that should be created to maximize the shareholder’s wealth In addition, capital structure affects the profitability and business risks that businesses themselves may encounter (Frank and Goyal, 2009) Therefore, choosing a capital structure between debt and equity plays an important role in financial management In fact, the variance of capital structure depending on the characteristics of each firm, the sector in which it operates, as well as the effects of macro and micro-economic factors Hence, instead of determining an optimal capital structure, the financial managers often consider finding the influential factors to it, or in other words, the firms’ use of financial leverage From the correlation between these factors and capital structure, we can assess whether the decision to use the loan or equity of the enterprise is reasonable or unreasonable, the shortcomings and risks arising from it, and based on that, to propose solutions to improve the efficiency of financial leverage and maximize asset value for businesses Currently, there haven’t still not many studies related to the capital structure in equitized enterprises in Vietnam The key reason is that the problem of financial management in many businesses has not been respected Besides, a large number of corporations have been equitized from state-owned enterprises, so they have also inherited the obligations and rights of the old company, and not considering about the efficiency of capital structuring However, in the context of Vietnam’s economic integration, enhancing the efficiency of capital structure needs to be more concerned by businesses than ever LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com Food processing is one of Vietnam’s key economic sectors, contributing a large part to the country’s GDP and economic growth According to the report of the VNCPA (2018), the business performance of food enterprises listed on the Ho Chi Minh Stock Exchange is not really effective Specifically, the average ROE of 10 listed companies in 2018 is 10.33%, ROA is 5.76% One of the main reasons for this situation is that the capital structure of enterprises is unreasonable and does not use capital effectively This causes a lot of trouble for food businesses in particular and other joint stock businesses in general, especially in the context of volatile business environment during the recent years Therefore, it is significantly necessary to make the studies on the factors affecting the capital structure and proposes the recommendations to enhance the efficiency of capital structure in these food companies This is the rationale for the author to choose the research topic: Factors affecting the capital structure of food companies listed on Ho Chi Minh stock exchange The author also expects that the research can contribute a part into the financial management of enterprises in the industry, to help enterprises have a more general view on the policies of mobilizing capital as well as provide appropriate solutions for enterprises, thereby contributing to raise efficiency of production and business activities Research questions and objectives The main objective of this study is to investigate the determinants of capital structure (DER) as well as its impact food companies listed on Ho Chi Minh stock exchange And based on that, it also aims to propose suggestions and recommendation to improve the capital structure in these firms and enhance their firm performance In order to fulfil the above objective, the study will answer the research questions as followings:  What are the factors affecting on the capital structure of food companies listed on HOSE?  How these factors impact on the capital structure of the food firms listed on HOSE? LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com  What are the recommendations suggested for the food companies listed on HOSE? Research subject and scope Research subject: the factors influencing on capital structure of food companies listed on HOSE Research scope: In terms of space, the scope includes the food processing firms which are currently listed on Ho Chi Minh Stock Exchange Accordingly, there are total 16 firms selected in the research (HOSE, 2018) In terms of time, the researcher collected data in the period of 10 recent years from 2008-2018 Research methodology In order to conduct the study, the author used statistical, comparative and regression methods from the quarterly financial data of food processing firms in the period of 20082018 Accordingly, the method applied mainly is the regression analysis that runs the econometric model to examine and investigate the correlation between the independent variables and dependent variable In specific, a multivariate regression model using fix random effect was employed to test the factors and its impacts on the capital structure of the above companies The structure of report The structure of study is organized into three main section as followings: Section 1: Overview of the topic The first section aims to provide literature reviews related to the research topics, including definitions, classifications, economic theories, scholars and research hypothesis used in this study Section 2: Model specification In this section, the author presents research methodologies to collect and analyze data Furthermore, theoretical model specification and descriptive statistic of data is also provided in this part LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com Section 3: Findings and Results The final part is to demonstrate the results of estimated model, tests for model’s possible problems and correct them And based on findings and results, some recommendations are also proposed LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com SECTION 1: OVERVIEW OF THE TOPIC 1.1 Overview about the capital structure 1.1.1 Definition of capital structure Capital is one of the most important factors that can help businesses survive and develop This source of capital is mobilized by enterprises in two main methods are loans and equity The capital structure of an enterprise is the ratio of total debt (including shortterm and long-term debt) to equity, in other words, capital structure relates to the deciding sources to finance companies’ businesses Ordinarily, at the start-up of a firm, equity is used to run the business, since equity charges no fixed cost on the firm; on the other hand, as the firm grows, debt becomes a preferred choice of a firm’s capital, and in the remainder of their life cycle, debt is preferred (Ross, 2002) The use of debt can come from the issuance of bonds or bills of exchange, while equity is divided into three types: retained earnings, preferred shares and common stock Each enterprise has its own structure depending on the decision of the corporate executives and this has a significant impact on the cost of the enterprise In addition, the capital structure of an enterprise also affects the return on equity (ROE) and the financial risks of the business 1.1.2 The roles of capital structure All business activities of the enterprise cannot operate normally if the enterprise does not have the financial ability or the financial situation of the business has problems The capital structure of an enterprise is the ratio between the use of equity and equity in an efficient way to improve the business results of an enterprise In order to determine this proportion appropriately, managers must consider and consider on a number of factors in order to maximize the benefits for shareholders The use of equity or debt is for the purpose of financing the business of the business However, each component has its own advantages and disadvantages when used Thus, analyzing the business activity of an enterprise in order to provide an optimal capital structure in specific circumstances is an urgent issue for financial managers LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com 1.2 The capital structure theories 1.2.1 Modigliani and Miller (M&M) theory Modigliani and Miller are the pioneers that conducted scientific study on capital structure area in 1958 and developed MM theorem (Hossain and Ali, 2012) According to Modigliani and Miller (1958) under prefect market where there are no taxes, transaction cost, bankruptcy and agency cost; the firm’s decision and capital structure is independent from firm’s market value and cost of capital The scholars affirm that the firms should be unconcerned choosing between debt and equity financing in perfect capital market (Modigliani and Miller, 1958) There are three proposition states by Modigliani and Miller in MM theory The first proposition is the firm’s capital structure does not affect the market value and average cost of capital (Abdul Jamal et al, 2013) The second proposition is the firm’s leverage does not affect weighted cost of capital (Abdul Jamal et al, 2013) The third proposition is the firm’s value does not affect by its dividend policy (Abdul Jamal et al, 2013) In year 1963, Modigliani and Miller modify MM theory by reflected on the cooperation tax and state that the firm can go for fully debt finance because debt is tax deductible and debt can increase the firm value (Akbar and Ahmad Bhutto, 2012) Modigliani and Miller (1963) emphasis that debt finance will increase corporate value because interest of debt is tax deductable while equity cost not tax deductable 1.2.2 Agency cost theory Jensen and Meckling are the pioneers developed agency cost theory and according to them, an optimal capital structure can be determined by minimizing the agency cost (Moosa, Li and Naughton, 2011) Jensen and Meckling (1976) define agency cost as sum of principle’s monitoring expenditure, agents bonding expenditure and the residual loss Agency cost arises because of conflict of interest between shareholders and managers and also due to separation management of firm and ownership (Abdul Jamal et al, 2013) There two types of conflicts: conflict between shareholders and manager and conflict between shareholders and bondholders (Jensen and Meckling, 1976) Since the managers 10 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com SECTION 3: FINDINGS AND RESULTS 3.1 Estimated models 3.1.1 OLS regression “Coefficients” shows the positive or negative relationship between the dependent variable and the independent variable and its influence “Prob” shows whether the independent variable is statistically significant With 5% significance level, if Prob 0.05, so it is assumed that H0 is not rejected at 5% significance level, then we will use REM model 3.2 Testing the model’s defect 3.2.1 Heteroskedasticity test Using White-test to test the heteroskedasticity phenomenon in the model, the results can be shown in Table 3.5: Table 3.3 Heteroskedasticity Test – White Test F-statistic 1.682168     Prob F(6,99) 0.1332 Obs*R-squared 9.806853     Prob Chi-Square(6) 0.1330 Scaled explained SS 7.108050     Prob Chi-Square(6) 0.3110 Source: Calculated by the author The value of White test W = 9.8068 < 12.5916, hence the heteroskedasticity phenomenon can be rejected in the model 3.2.2 VIF Test 30 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com Variance inflation factor (VIF) assesses whether factors are correlated to each other (multicollinearity) VIF testing results can be illustrated in Table 4.5 as follows: VIF C  NA ROA  1.285993 TANG  1.069852 GROW  1.020633 TAX  1.165407 SIZE  1.490629 UNI  1.418274 Source: Calculated by the author As the rule of thumb, if VIF of a variable exceeds 10, then there is indication of the existence of multicollinearity (Gujarati, 2007) As can be seen from table that presents the VIF of the variables, none of them is above 10 This indicates that there is no problem of multicollinearity in this analysis 3.3 Discussion on the estimated model According to the regression analysis, the capital structure model of the food enterprise listed on HOSE can be illustrated by the following equation: DER = -0.2431 – 1.3863 ROA – 0.0942 TANG + 1.0151 GROW + 0.1951 TAX + 0.1484 SIZE – 0.9555 UNI + 0.1248 3.3.1 Profitability ROA is the variable that has the most influence on DER with 𝛼 = -1.3863 This means that if the profitability of the food enterprises increase by unit, the capital structure will be reduced by -1.3863 units in the case of other factors unchanged This result shows that profitability of these enterprises is an important determinant of capital structure of the food processing companies listed on HOSE 31 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com From the results of the regression model, it reflects that profitability is an influencing factor the capital structure of the food companies This effect is counterproductive, meaning that if a company has higher return on assets, it will tend to reduce the use of debt rather than they will use the additional retained earnings as the major capital for business This is entirely consistent with the viewpoints of peckingorder theory and coincides with the hypothesis H1 set out in the previous sections In addition, this result is similar to the studies of Faruk Hossain and Ayub Ali (2008); Mutalib (2011); Quayyum (2013); Le Dat Chi (2013) Therefore, hypothesis H1 is accepted; H1: There is a negative relationship between capital structure and profitability ratio 3.3.2 Firm size The variable SIZE has 𝛼 = 0.1484, which means that the size of the food processing companies increases by unit, the capital structure will increase to 0.1484 units in the case of other factors unchanged This result shows that the firm size has a positive influence on the capital structure of food enterprises listed on the HOSE, meaning that the larger the firm is, the more likely it is to use debt Thus, firm size is one of the factors affecting capital structure and is statistically significant in the research model Specifically, firm size has a positive effect, meaning that larger firms will use debt more than equity This is entirely consistent with the tradeoff and agency cost theories, when large-scale companies are synonymous with retained earnings and higher idle money Therefore, companies will take full advantage of this available capital This result is similar to those of Samuel G.H Huang and Frank M Song (2006); Doan Phi Ngoc Anh (2010); Vu Thi Ngoc Lan (2014) as mentioned above Therefore, the hypothesis H2 is accepted: H2: There is a positive relationship between capital structure and firm size 3.3.3 Tangible fixed assets 32 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com The variable TANG has the least effect with 𝛼 = -0.0942, which reflects that the ratio of fixed assets of food processing enterprises increased by unit, the capital structure will be reduced by -0.0942 units in the case of other factors are constant This result shows that the ratio of fixed assets to total assets has a negative impact on the capital structure of food companies listed on the HOSE It shows that the more fixed assets, the more debt the enterprise has used According to the trade-off and agency cost theories, the proportion of fixed assets is positively related to capital structure This means that businesses with more fixed assets are more likely to mortgage, thus making it easier to access loans However, the analysis of food processing companies listed on HOSE shows that fixed assets have a negative effect on capital structure Therefore, the enterprises with many fixed assets tend to use less more debt This result is also shown in the research of Doan Ngoc Phi Anh (2010) Therefore, the hypothesis H3 is rejected for observed sample data, so: H3: There is a relationship between capital structure and tangible asset ratio 3.3.4 Growth opportunities The GROW variable has 𝛼 = 1.0151, which means that the growth of food businesses increased by unit, the capital structure will increase to 1.0151 units in the case of other factors unchanged This result shows that the growth rate has a positive impact on the capital structure of the food processing enterprises listed on the HOSE, meaning that the higher the growth rate, the more likely the company is to borrow Thus, the growth rate is shown to have an influence on the capital structure When businesses are forecasted to have high growth rates in the future, shareholders tend to to take full advantage of the benefits of these opportunities and not want to share benefits for others Therefore, they will finance it entirely by equity According to the trade-off and agency cost theories, the growth has a negative impact on the capital structure of 33 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com enterprises However, according to the regression model results, the growth rate has a positive effect on capital structure This result is also supported by studies of Faruk Hossain and Ayub Ali (2008); Vu Thi Ngoc Lan (2014) as presented above Therefore the hypothesis H4 is proposed to be rejected, so: There is a positive relationship between capital structure and growth rate 3.3.5 Corporate tax rate The variable TAX has 𝛼 = 0.1951, which means that the tax rate of food companies increased by unit, the capital structure will increase to 0.1951 units in the case of other factors unchanged This result indicates that the ratio between tax and profit before tax is positively correlated with the capital structure of food enterprises listed on the HOSE stock exchange The income tax of enterprises in the sample ranged from 16% to 55% This tax rate is generally stable over the years in the research sample According to the trade-off theory, corporate income tax has a positive relationship with the capital structure In fact, Vietnam companies also take full advantage of income tax benefits The study of the regression model also shows that capital structure and corporate tax rates have a positive impact on each other, similar to the results of Faruk Hossain and Ayub Ali (2008) Based on the analysis, it is recommended that commercial banks should issue corporate bonds as a cheap source of finance to entails the enjoyment of the interest tax shield In other words, the use of debt improves the shareholder’s wealth Besises, commercial banks should also engage strategic investors Such investors should provide loans to the commercial banks for example such strategic investor can advance long term loans to the banks Hence, the hypothesis H5 is accepted: H5: There is a positive relationship between capital structure and corporate tax rates 34 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com 3.3.6 Firm characteristics The UNI variable has 𝛼 = - 0.9555, which means that if the firm characteristic factor increases by unit, the capital structure of food processing enterprises will decrease by -0.9555 units in the case of other factors unchange Thus, the proportion of cost of goods sold and net revenue of food enterprises listed on the HOSE is negatively correlated with the capital structure of these enterprises The results of regression analysis show that the firm characteristic factor, calculated by the ratio of cost of goods sold and net revenue, has a negative impact on the capital structure of food enterprises This result is similar to the study of Tran Hung Son (2008) on the impact of specific characteristics of the industry on capital structure Therefore, hypothesis H6 on firm characteristics is accepted: H6: There is a negative relationship between capital structure and firm characteristics In general, from the regression model results, it can be seen that the influence of factors on the capital structure of food processing enterprises listed on the HOSE stock exchange follows the predictions in the agency cost, trade-off and pecking order theories 3.4 Recommendations 3.4.1 Recommendations for the companies First, the food processing firms should use the capital mobilization plan to issue long-term bonds and increase the attractiveness of bonds to investors as well as to mobilize more capital for businesses Enterprises can be disbursed immediately and proceeds from the issuance of bonds instead of waiting for disbursements each time as when borrowing from banks Furthermore, when market interest rates are low, firms can issue long-term bonds at fixed rates in order to take advantage of low-cost capital rather than borrowing at floating rates There are many forms of bond issuance with many preferential conditions for investors such as secured bonds, free convertible bonds 35 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com Therefore, the transparency of information, building the prestige of enterprises need to be focused and sustained by this not only better the companies’ operation but also facilitate the mobilization of capital sourced from the investment fund In addition, the companies should also understand the legal corridor; learn from the experience of leading companies to use effectively, in accordance with the specific situation of their business Second, the enterprises should develop in the direction of concentrating in cities and provinces in order to increase the capacity of each enterprise as well as the entire production system in accordance with the development planning of the State The infrastructure has been improved, developed in a synchronous manner, creating a favorable environment for developing products and services to compete with big enterprises in the world In addition, investment in research and development (R & D) facilities to nurture future products should also be addressed Third, enterprises need to promote investment, expand cooperation with partners in the world, especially in the markets of North Europe, USA and Japan These are the developed markets, with high demand for food products as well as the world’s leading technology companies As a result, local firms can learn from experience as well as promote Vietnamese products in the international market And last but not least, it is also suggested that the companies should improve the qualification of financial managers The quality of human resources is always an important factor to help businesses use capital effectively, avoid waste and bring high profit per capital used Hence, the firms need to improve their knowledge and skills on capital management for corporate finance managers through professional training courses or send outstanding staff to study at the top schools and universities in the world In addition, the enterprises also need to consult with economists as well as learn from the experience of leading firms to learn success and avoid making mistakes Updating and leveraging the achievements of the world’s modern management of capital also help businesses choose the appropriate structure and form of capital mobilization to achieve high efficiency 36 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com 3.4.2 Recommendations for the Government In order to support enterprises to further improve their capital structure, the State needs policies to create favorable conditions for enterprises to access capital market products through diversification of products in the market Besides, effective management and monitoring mechanisms are the criteria set for the capital market solution group Specific measures within this group of solutions include: Firstly, to promote the development of the bond market in Vietnam Although the bond market has made remarkable progress, the size of this market is small when compared to the size of the stock market in terms of number of issuers and volume of deals Most of the bonds are government bonds, the number of corporate bond issuance is still low compared to the potential This also affects the capital structure of the business, when the channel to raise loans by issuing bonds is not really effective Specific measures of this solution include: Establishing a professional credit rating organization to objectively assess the prestige as well as financial capacity of bond issuing businesses This will create a peace of mind for investors when participating in the trading of corporate bonds In addition, there should be mechanisms to develop the secondary bond market When this market is really developing, the increased bond liquidity will help businesses easier to issue new bonds Secondly, to establish and develop the financial loan market in a professional manner The financial loan market is quite new in Vietnam The access of the companies to this market is not much, even the understanding of such products is limited Even the financial leasing companies, providing financial loans are not really professional in Vietnam The documents and regulations of this market are not yet complete For that reason, a proposal is set forth that it is necessary to build and fully develop the financial loan market in Vietnam Last but not least, to perfect the mechanism for managing information of listed companies with financial reporting standards of businesses This measure directly affects the quality of information published from businesses If the standards are built on a 37 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com rigorous scientific basis, it will improve the transparency of information from business activities to the public, along with improving investor confidence On the contrary, when the information is misled, it will reduce the confidence in investors and it will be hard difficulty for companies to mobilize capital from the public through both bond and stocks channels 38 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com REFERENCES Abdul Jamal, A A., Geetha, C., Mohidin, R., 2013 Capital Structure Decisions: Evidence from Large Capitalized Companies in Malaysia Interdisciplinary Journal of Contemporary Research in Business Anh, D.P., 2010 ‘Cac nhan to anh huong den cau truc tai chinh va hieu qua tai chinh: Can theo phuong phap phan tich duong dan’, Journal of Science and Technology, Vol 40(2) Chi, L.D (2013), ‘Cac nhan to anh huong den viec hoach dinh cau truc von cua cac nha quan tri tai chinh tai Viet Nam’, Journal of Development and Integration, (19), 2228 Cotei, C., Farhat, J & Abugri, B., 2011 Testing trade-off and pecking order models of capital structure:does legal system matter? Managerial Finance Journal Hossain, M & Ali, M., 2012 Impact of Firm Specific Factors on Capital Structure Decision: An Empirical Study of Bangladeshi Companies International Journal of Business Research and Management (IJBRM) Huang, G., & Song, F M., 2006 The determinants of capital structure: evidence from China China Economic Review, 17(1), 14-36 Jensen, M & Meckling, W., 1976 Theory of the Firm: Managerial Behavior, Agency Costs and Ownership Structure Journal of Financial Economics Lan, V.T., 2014, ‘Tai cau truc von tai Tap doan Dau Quoc gia Viet Nam’, Minor thesis, National Economic University Modigliani, F & Miller, M., 1958 The cost of capital, corporation finance and the theory of investment The American Economic Review, 48.3: 261- 297 Mutalib, M., 2011 Determinants of capital structure in cement industry: a case of Nigerian cement listed companies.Qayyum, S 2013 Determinants of capital 39 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com structure: an empirical study of cement industry of Pakistan, Interdisciplinary Journal of Contemporary Research in Business 24(11): 784–795 Ross, SA, 2002, Fundamentals of Corporate Finance, 6th edition, New York Son, T.H., 2008, ‘Co cau von va hieu qua hoat dong kinh doanh cua cac cong ty niem yet tren So giao dich chung khoan TP.HCM’, Journal of Economic Development, 218 40 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com INDIVIDUAL ASSESSMENT Name Phạm Thị Vân Anh Phạm Mai Dương Vũ Ngọc Quỳnh - 10 10 Phạm Mai Dương 10 - 10 Vũ Ngọc Quỳnh 10 10 - Average Score 10 10 10 Evaluator Phạm Thị Vân Anh 41 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com ... are the factors affecting on the capital structure of food companies listed on HOSE?  How these factors impact on the capital structure of the food firms listed on HOSE? LUAN VAN CHAT LUONG... recommendations to enhance the efficiency of capital structure in these food companies This is the rationale for the author to choose the research topic: Factors affecting the capital structure of food companies. .. considers food processing companies listed on Ho Chi Minh stock market, during the period 10 years 2008 - 2018 Although all of the stock companies are considered, the author only chooses the companies