1 PREFACE - How does financial structure affect profitability? - Besides financial structure, what factors affect the profitability of listed construction companies? Reason for selecting the topic Construction sector plays a very important role in the overall development of the country As the economy grows, the profits of businesses increase, and the strong State’s budget is the condition for the development of the construction sector through the improvement of infrastructure for the people and businesses such as road construction of roads, bridges, offices, housing, However, the construction sector has been affected much due to economic crisis in the world and economy government policy of Vietnam since 2008 Currently, although the lending interest rate has decreased and the state has preferential policies for the construction sector, however, the industry has failed to recover immediately Like construction companies in general, listed companies in the construction sector has very low business effectiveness, since 2008 and tended to reduce gradually, especially since 2012 According to the calculations by the author, the profitability of the inputs is very low, specifically: Return On Assets (ROA) in the period of 20122015 reached only about 1% to 3%; Return On Equity (ROE) was from 4% to 5% In fact, the profitability of inputs is too low compared to other industries’ and to the interest rates, which causes difficulties for the construction sector in expanding production and attracting investment - What solutions are addressed to improve profitability in construction companies? Subject and scope of research - Subject of research: The research subject of the thesis is the relationship between financial structure and profitability of listed construction companies in Vietnam - Scope of research: + Regarding the space: study the construction companies listed on HNX and HOSE + Regarding the time: study the construction companies listed from 2008 to 2015 + Regarding the content: study of financial structure, profitability and relationship between financial structure and profitability in listed construction companies in Vietnam New conclusions of the Dissertation The Dissertation has the following new conclusions: The construction sector has its own characteristics, i.e large capital, payment time influenced by many factors such as owner's capital, payment profile, construction progress, and so does its financial structure Compared with other production lines, the debt ratio of the construction companies is the highest, of which shortterm debt is prevailing Firstly, theoretically, when studying financial structure and affecting profitability, the author only focuses on study of the financial structure which is capital structure in the narrow sense In this study, the author examines the financial structure on two aspects of capital formation and capital use,i.e financial structure study in a broad sense including capital structure and asset structure With the importance in the relationship between financial structure and profitability, theoretical and empirical studies have been conducted in the world and in Vietnam, but the results have not been consistent in terms of the impact direction due to varied economic environment and business line in different countries In addition, research methods are limited Secondly, the analytical methods used in previous studies often include the Ordinary Least Square (OLS), the Fixed Effects Model (FEM), and Random Effects Model (REM) In this study, the author uses the Generalized Method of Moment (GMM) For the above reasons, the author decides to study the topic of relationship between financial structure and profitability in construction companies listed on the stock market in Vietnam Objectives of the study The basic objective of the project is to establish a suitable financial structure to enhance the profitability for listed construction companies in Vietnam From that basic goal, specific research objectives are defined as: - Analysis of the current situation and trend of financial structure of listed construction companies in Vietnam - Analysis of current situation and trend of profitability fluctuation of listed construction companies in Vietnam - Determining the relationship between financial structure and profitability in listed construction companies in Vietnam - Identifying factors other than financial structure that affects profitability - Proposing the solutions to improve profitability in listed construction companies in Vietnam Research questions To achieve the objectives set out, the study focuses on the following questions: General questions: Which financial structure is suitable for enhancing profitability in listed construction companies in Vietnam? Specific questions: From the above general questions, the author will answer the following specific questions: - What are the characteristics of financial structure of listed construction companies? - What are the profitability characteristics of the listed construction companies? Thirdly, in terms of research models, in addition to the usual variables that authors in the world and some other studies in Vietnam use, the author supplements additional variables reflecting the structure of assets and specific variables of the construction sector which are Inventory ratio (INVE), Receivables ratio (RECE) into the research model Fourthly, on the results of the study, the author points out that there is no correlation between the financial structure and the profitability reflecting the market price (P/E and Tobin's Q) Meanwhile, financial structure has impact on profitability by book value: ROA, ROE, ROS (profitability) and GM (gross profit margin) Other factors also affect profitability such as company size, revenue growth, asset utilization, and age Fifthly, based on the findings of the study, the author has proposed reasonable financial structure solutions and other solutions to increase profitability in the construction sector To implement these solutions, the author has made recommendations to the State and Line Agencies, Construction Contractors Association, Stock Exchanges and listed construction companies in Vietnam Structure of the dissertation Apart from the table of contents, the list of abbreviations, list of tables, pictures, reference list and annexes, the Dissertation is divided into chapters: Chapter 1: Overview of research on relationship between financial structure and profitability in enterprises Chapter 2: Theoretical foundation of the relationship between financial structure and profitability in construction companies Chapter 3:Research methodologies Chapter 4:Results of empirical research on the relationship between financial structure and profitability in construction companies listed on the Vietnamese stock market Chapter 5:Setting up a sound financial structure to improve profitability of construction companies listed on the Vietnamese stock market 3 CHAPTER 1: OVERVIEW OF RESEARCH ON RELATIONSHIP BETWEEN FINANCIAL STRUCTURE AND PROFITABILITY IN ENTERPRISES Item Positive impact (+)and statistical significance Negative impact (-) and statistical significance Impact without statistical significance Foreign studies There are a number of studies on the impact of capital structure on profitability including Abor (2005), Gill et al (2011), Shubita and Alsawalhah (2012), Ebaid (2009),…However, impact direction of the capital structure on profitability of the studies is not consistent, depending on the type of industry, economic conditions in each country Below is a summary of the research results of some authors STD LTD Table 1.1.Impact direction of the capital structure on profitability Item Positive impact (+)and statistical significance Negative impact (-) and statistical significance Impact without statistical significance STD LTD A bor (2005); Grill et al Shubita and Alsawalhah (2012); Real estate of Salim and Yadaw (2012); Muritala (2011); Cultivation of (2012); Berzkalne’s listed companies (2014); Salim and Yadaw (2012) (2012); Dawar A bor (2005); Grill et al ShubitaandAlsawalhah (2014) (2011); Grill et al (2011) A bor (2005); Dawar (2014); service sector of Salim and Yadaw (2012); Javed et al in manufacturing (2014) enterprises STD LTD Impacts on P/E Zeitun and Tian (2007) Zeitun and Tian (2007) Zeitun and Tian (2007) Ebaid (2009); Khan (2012); Grill et al (2011) in the service sector; the remaining sectors of Salim and Yadaw (2012) Source: generalized from previous studies by the author As the capital resources are available, how to distribute the capital into each sector will greatly affect the business performance of the enterprises Especially in non-financial businesses, the structure of capital investment in assets will affect the cash flow in the business, thus affecting the business efficiency and profitability of enterprises Therefore, there are some studies on the impact of asset structure on profitability The majority of studies using indicators representing for the asset structure are the proportion of fixed assets (TANG) taken into the analysis model Table 1.2 shows the results of some studies on asset structure to profitability Table 1.2 The impact of asset structure on profitability Item Positive impact (+)and statistical significance TD STD LTD TD Khan (2012); Abor (2007) Impacts on Tobin’s Q Abor (2007); Khan (2012), Salim and Negative impact (-) and statistical significance Impact without statistical significance Impacts on ROE TANG Dawar2014); Puoraghajan (2012) et Muritala (2012); Onaolapo and Kajola (2010) al Impacts on ROA TANG Dawar (2014) Zeitun and Tian (2007); Muritala (2012); Sheikh and Wang (2013); Onaolapo and Kajola (2010); Puoraghajan et al (2012) Impacts on Tobin’s Q TANG Berzkalne (2014) Berzkalne (2014) Berzkalne (2014) Impacts on GM Khan (2012); Abor (2007) Khan (2012); Abor (2007) Abor (2007); Zeitun andTian (2007) TD Impacts onROS TD STD LTD Salim and except for Yadaw (2012); Zeitun and Tian (2007) Khan (2012); LTD Ebaid (2009); Khan (2012); The remaining sectors of Salim and Yadaw (2012); Javed et al (2014) Ebaid (2009); Khan (2012) Impacts on ROA Ebaid (2009); Khan (2012); Zeitun and Tian Javed et al (2014) (2007); Sheikh and Wang (2013); Construction, consumption, real estate of Salim and Yadaw (2012); Granny (2014) Ebaid (2009); Khan (2012); Dawar (2014); Zeitun and Tian (2007); Sheikh and Wang (2013); Construction, Consumption, Real Estate and Cultivation of Salim and Yadaw (2012); Granny (2014) Zeitun and Tian (2007); Sheikh and Wang Ebaid (2009); Khan (2012); (2013); Dawar (2014); Granny (2014) Salim and Yadaw (2012); Javed et al (2014) TD Zeitun and Salim and STD Impacts on ROE TD Abor (2007); Tian (2007) Yadaw (2012) Khan (2012); Yadaw (2012) cultivation Javed et al (2014) Zeitun and Tian (2007) Source: generalized from previous studies by the author Javed et al (2014) 1.2 Domestic studies Ebaid (2009) Ebaid (2009) Ebaid (2009) For the last 10 years, Vietnam has had some research topics on financial structure These topics are mainly concerned with factors influencing capital structure Few topics mention the impact of capital structure on business performance in some sectors or listed namely by Trinh ThiPhanLan (2013), Doan Ngoc Phuc (2014), Nguyen Thi Hong Nhung and Do Thi Ly (2016), Although the above research has succeeded in exploring the relationship between capital structure and profitability, there are still some limitations, such as the short observation period, no observation of the Vietnamese economic up and down periods, shortage of some variables in regression models, limited model estimation method 5 1.3 Establishing the research subject Overally, most of the studies use variables representing the capital structure as TD, STD and LTD; The variables representing the asset structure is TANG The impact direction of capital structure and asset structure on the profitability is not uniform, depending on many factors such as: Time to study the development or recession economy; specific characteristics of each country and each business line The authors' control variables included in the study model are: SIZE, GROW, LQT, TURN, INT, AGE, The impact direction of these variables on profitability is not consistent in all studies Limitations in previous studies in the impact of financial structure on profitability in a particular industry have not led to analysis of the sector’s specific variables As a result, the estimates are still limited in terms of their particular characteristics In terms of research methods, most of the studies used quantitative research with conventional multivariate regression models (OLS, FEM, REM) However, most of the studies have not tested the defect of the model so their results are not convincing In Vietnam there is little research on the impact of financial structure on profitability, especially in a particular sector Indicators reflect profitability of the authors in Vietnam is often based on book value, less research based on market assessment In addition, the profitability reflect norms are often used to analyze the tax profit, while the CIT rate of Vietnam changes continuously in the period of 2008-2014, so the results of the study will be affected CHAPTER 2: THEORETICAL FOUNDATION OF THE RELATIONSHIP BETWEEN FINANCIAL STRUCTURE AND PROFITABILITY IN CONSTRUCTION COMPANIES 2.1 Financial structure of construction companies 2.1.1 Business characteristics of construction companies affect the financial structure Basic construction is a specialized industry that creates assets of great value to society Building basic development creates many essential products serving the community such as transportation works, buildings, schools, electrical stations to make a "picture" of the economy more vivid Compared with other production sectors, basic construction has its own features in some aspects such as characteristics of construction products are often valuable; single consumption method; long working time; external capital mobilization; long term payment and inventory is unfinished product value;… 2.1.2 Financial structure of construction companies Financial Structure is the structure of capital and structure of assets in the enterprises 2.1.2.1 Capital structure Capital structure is the indicator reflecting the proportion of each source of capital in the total capital of the enterprise To illustrate the structure of capital, the author uses three indicators: debt ratio, short-term debt ratio and long-term debt ratio 2.1.1.2 Assets structure Asset structure is an indicator that reflects the weight of each asset part of the total asset of the business Due to the characteristics of the construction sector, the author analyzes a number of indicators reflecting the structure of assets: the proportion of inventories, the proportion of receivables, the proportion of fixed assets 2.2 Profitability and the relationship between financial structure and profitability 2.2.1 Profitability The profitability concept is an indicator reflecting the current and future potential for profitable business To denote profitability, the author uses indicators based on book values and market performance indicators Researchers often use profitability reflecting indicators at the following book prices: asset volatility, equity yield, net return and gross profit margin For the profitability reflecting market which is often used by analysts: Price-to-Earnings Ratio or P/E ratio, Price/Book ratio (Tobin’s Q) 2.2.2 The relationship between financial structure and profitability Any business wants to maximize profits Therefore, they are constantly seeking solutions from capital mobilization to capital use policies to improve business efficiency of enterprises There have been theories supporting the business of raising the impact of financial structure on profitability such as M & M theory, the theory of conversion, the theory of classification hierarchy, the structure of optimal properties CHAPTER 3: RESEARCH METHODOLOGIES Variable’s name 3.1 Model and hypothesis 3.1.1 R esearch model In this study, the author uses quantitative methods to test the effect of financial structure and control variables on profitability Liabilities / Total capital STD Short-term TURN Formula Net revenue / average assets liabilities / AGE Time in years from transition to joint stock company to the time of research Source: the author 3.1.2 R esearch hypothesis Based on a number of theories on the impact of financial structure on profitability and economic conditions in Vietnam, the author presents hypotheses about the impact of financial structure and other indicators on the profitability as summarized in Table 3.3 Book value - ROA - ROE Financ ial structu re TD Total capital Control variables - SIZE - GROW - TURN - AGE Capital structure - TD - STD - LTD Variable’s name Formula Profita bility Asset structure - TANG - INVE - RECE Table 3.3: Summary of the research hypothesis of the independent variable, control to profitability - ROS Assumption Variable’s name Impact direction Assumption Variable’s name Impact direction - GM H1 TD, STD, LTD - H5 SIZE + Market value - P/E - TOBIN’SQ H2 TANG + H6 GROW + H3 INVE - H7 TURN + H4 RECE - H8 AGE + Source: the author generalizes from research assumptions Figure 3.1: Research model Source: the author 3.2 Data collection and processing 3.2.1 Data collection Regression equations: The variables that reflect the capital structure are TD, STD, and LTD These three variables are related to each other (TD = STD + LTD), so if all three variables are included in the regression equation, defects in the model will occur Thus, for each regression equation, the author shall address either the TD variable or the two STD variables and the LTD into the equation The author have obtained 12 regression equations, each variable depends on ROA, ROE, ROS GM; P / E and Tobin'sQ has two equations Variable’s name ROA Formula Table3.1 :Description of variables in the model Variable’s Formula name LTD Return on assets 3.2.1.2 Data collection at Ho Chi Minh City Stock Exchange capital To collect data on Ho Chi Minh City Stock Exchange, the author lists all the companies in the construction sector classified from 2009 to 2014 and then, select the companies simultaneously present in six years from 2009 to 2014 and as the results, the author has 12 companies After having the list of 12 companies in the construction sector, the author collects their financial statements for the eight years from 2008 to 2015 and checks the proportion of their construction sector revenue in 2015 If revenue of the construction business is the highest, select it, unless otherwise delete it The author collects 12 firms with 96 corresponding financial statements Return on equity TANG ROS Return on sales INVE Inventory / Total Assets GM Gross RECE Short-term receivables / Fixed assets / Total assets net revenue Total assets PE Price-to-Earnings Ratio SIZE Ln(asset) TOBINSQ Market price / earnings GROW DTTi-DTT(i-1) per share In October 2012, Hanoi Stock Exchange officially classified the business sector In order to collect data on Hanoi Stock Exchange, firsly, the author takes the complete list of construction companies classified in 2012, 2014, 2014, 2015, then selects the companies present in years of 2012, 2013, 2014 and 2015, the author collects 61 companies After collection of data of 61 construction companies, the author continues to collect financial reports in eight years from 2008 to 2015 and checks their proportion of construction revenue in 2008 If revenue of the construction business is the highest, select it, unless otherwise delete it The author collects 61 firms with 488 corresponding financial statements Long-term debt / Total ROE Margin/ 3.2.1.1 Data collection at Hanoi Stock Exchange DTT(i-1) 3.2.2 Data processing From data on financial reports through excel software to calculate the variables in the research model Then, the data in the model is processed on the Stata 14 software according to the regression method for array data 9 10 CHAPTER 4: RESULTS OF EMPIRICAL RESEARCH ON THE RELATIONSHIP BETWEEN FINANCIAL STRUCTURE AND PROFITABILITY IN CONSTRUCTION COMPANIES LISTED ON THE VIETNAMESE STOCK MARKET 4.1 Overview of construction companies listed on Vietnam's stock market The establishment of listed companies in general and listed construction companies in particular is associated with the development of Hanoi Stock Exchange and Ho Chi Minh City Stock Exchange By 2014, there are 104 listed construction companies out of 702 listed companies, accounting for 15.2% 4.2.2 R eality of the profitability The profitability of assets, equity, and turnover in the period of 2008-2015 has many changes In the period of 2009-2010, the number of indicators at the peak level will begin to decrease gradually from 2011 From 2012 to 2015, the value of ROA, ROE, ROS is very low This is also the most difficult period of the Vietnamese economy so the construction companies is relatively affected Figure 4.15 shows the variability of the profitability -reflecting indicators by book value 0.3 In absolute terms, total equity of listed construction companies has increased over time, but the proportion changes and the highest change is in 2011 (6.49%) The total assets of construction enterprises have also increased over time but the proportion has declined since 2011 0.2 4.2 Reality of the financial structure and profitability of construction companies listed on the stock market in Vietnam ROE 0.1 GM Figure 4.15: ROE, ROA, ROS and GM movements in the period of 2008-2015 Source: the authorcalculates from the financial data of the listed construction companies in the period of 2008-2015 4.2.1.1 Reality of the capital structure The capital structure of listed construction companies is characterized by relatively large debt ratios For companies with very large changes in financial structure between small and large financial structure, Figure 4.9 shows the overview of financial structure for the period of 2008-2015 For profitability, market capitalization was the highest in 2009 and 2010 and lowest in 2011 From 2012, this indicator tended to increase Figure 4.16 illustrates the variation of Tobin's Q over the study period 1.000 0.800 0.600 0.400 0.200 0.000 0.800 0.600 TD STD 0.200 ROS 2008 2009 2010 2011 2012 2013 2014 2015 4.2.1 R eality of the financial structure 0.400 ROA LTD 0.000 Tobin's Q 2008 2009 2010 2011 2012 2013 2014 2015 Figure 4.16: Average Tobin's Q in the Construction Sector in the period of 2008-2015 2008 2009 2010 2011 2012 2013 2014 2015 Source: calculated by the author Figure 4.9: Capital structure of listed construction enterprises in the period of 2008-2015 Source: calculated by the author 4.2.1.2 Reality of the asset structure 4.3 Analyzing the relationship between financial structure and profitability in listed construction companies in Vietnam 4.3.1 R egression analysis process The asset structure of listed construction companies in the period of 2008-2015 has not changed much over the years TANG values have been decreasing since 2008, while TANG values are much smaller than INVE and RECE Meanwhile, the value of RECE tends to increase gradually and has a relatively high value This also causes companies to build more liquidity problems INVE tends to decrease slightly from FY2011, but inventories also account for a relatively large share of total assets of listed construction companies Figure 4.10 illustrates the asset structure of listed construction companies in the period of 2008-2015 0.4 For the most accurate regression analysis, the author performs the regression analysis in the following steps: Step 1:Select FEM or REM model, author uses Hausman test Step 2:Select the best model in step and the OLS model to select the optimal model Step 3:Test the defects of the selected model in step If the optimal model has no defect, select the optimal model for analysis In contrast, the optimal model has a defect if it can be overcome, then overcome it In case of failure to overcome the problem, continue development to choose the appropriate Analytical process is performed on the Stata 14 software 0.3 0.2 0.1 TANG 4.3.2 A nalysis results INVE According to the regression analysis, at first, the author selects the most suitable model in the FEM and REM models through the Hausman test The results show that the equation with the P/ E dependent variable without statistical significance so the author removes it from the research subject The remaining ten optimal model equations are the FEM model Next, the author selects the optimal model in two OLS and FEM models Results show that in all ten equations, the optimal model is the FEM model Next, the FEM model defects are checked by the author with the results shown in Table 4.38 RECE 2008 2009 2010 2011 2012 2013 2014 2015 Figure 4.10: Asset structure of listed construction enterprises in the period of 2008-2015 Source: calculated by the author Equation Table 4.38: Generalization of defects of regression models Endogenous Dependent Differential Self-correlation Endogeneity 11 variable Equation1a Equation1b Equation2a Equation2b Equation3a Equation3b Equation4a Equation4b Equation5a Equation5b variable TD STD, LTD TD STD, LTD TD STD, LTD TD STD, LTD TD STD, LTD 12 error variation x x x x x x x x x x ROA ROE ROS GM TOBIN’SQ 5.1 Viewpoints and principles for establishing financial structure to improve profitability in construction companies listed on the Vietnamese stock market x x x x x x x x x x x x x x Source: generalized by the author Table 4.44: Summary of the results of variables to profitability TD Dependent variable ROA ROE ROS GM - To establish financial structure in listed construction companies, the following points should be observed: - Establishment of the financial structure must be appropriate to the characteristics of the construction sector and the characteristics of each company To overcome defects in ROA, ROE and GM dependent equations, the author uses the Generalized Method of Moment (GMM) model The strength of the GMM estimation method is to solve the endogenous problem in the model In addition, the method of estimating GMM also solves some of the other defect problems of the model: the variance of change error, self-correlation, (Nguyen Minh Tien, 2014) For equations with ROS dependent variable, the author corrects the variance of variance by adding the "robust" command at the end of the regression The equation with the dependent variable Tobin'sQ has been changed at the same time and the correlation is correct, the author corrects with the command "xtgls" added "panel (correlated)" in the statement of the model as above, regression results have the impact of variables in Table 4.44 Independent variable 5.1.1 Viewpoints for establishing financial structure Assumptions Results - Correctly follow the assumption -Establishment of the financial structure must comply with government policies on interest expenses, loan limits, management, transfer and issuance of shares 5.1.2 Principles for establishing financial structure Establishing financial structure should adhere to the following principles: Firstly, the establishment of the financial structure must comply with the principle of conformity, reflected in the following aspects: In accordance with the general development conditions of the economy in the world and the country; It is suitable with the conditions, the development cycle of the enterprise and the suitability between the mobilization and the use of capital in the enterprise Secondly, the establishment of the financial structure must follow the principle of flexibility Managers need to be flexible in applying capital structure theories In addition, managers need to be flexible in mobilizing and using capital to meet the construction progress Thirdly, establishing the financial structure must follow the principle of feasibility When the solution to improve the financial structure, it requires feasibility It is not feasible for an enterprise to so, it must be synchronous from the outside, such as ministries, branches, investors, stock exchanges to the inside of the enterprise STD - - - - - LTD - - - - - TANG - N N N + Correctly follow the assumption Incorrect INVE - N N - - Partly correct RECE - N N N - Partly correct Correctly follow the assumption SIZE + + N + + Prominently correct GROW + + N N + Prominently correct TURN + + N - + Partly correct AGE - - - - + Wrong Note: “ –”: Negative impact with statistical significance “+”:Positiveimpact with statistical significance “N”: impact without statistical significance 5.2 Solutions to establishing financial structure and other solutions to improve profitability in construction companies listed on the stock market in Vietnam 5.2.1 Solutions to establishing financial structure 5.2.1.1 Re-structure of the capital structure According to the analysis of Chapter 4, the higher the proportion of debt on the capital is, the lower the profitability of inputs is Therefore, enterprises should pay attention to capital structure in the direction of reducing debt ratio, short-term debt ratio and long-term debt ratio In order to this, enterprises need to some specific tasks such as: The enterprise should regularly analyze the debts to be paid in order to have appropriate repayment plans, limiting the loans of credit institutions in the period the difficult economic times, increasing equity to expand the scale and reduce the debt ratio, use profits to reinvest 5.2.1.2 Re-structure of the asset structure Source: generalized by the author For the equation with the dependent variable Tobin'sQ, it shows that the value of Prob>chi2 of the model is high (0.3557 and 0.4143), and all variables reflecting the financial structure affect TOBIN'SQ but it has no statistical significance Thus, for the equation with the TOBIN 'SQ dependent variable, the author will not analyze in the following sections CHAPTER 5: SETTING UP A SOUND FINANCIAL STRUCTURE TO IMPROVE PROFITABILITY OF CONSTRUCTION COMPANIES LISTED ON THE VIETNAMESE STOCK MARKET Enterprises need to study to structure the property in the most reasonable way, because the property structure has a direct impact on the profitability Specifically, the proportion of fixed assets, the proportion of inventory, and the proportion of receivables have a negative impact on ROA Therefore, in order to increase the efficiency of asset use, enterprises should: limit fixed asset investment when revenue is low, promptly recover debts; To minimize the value of unfinished products to reduce the value of inventories 5.2.2 Other solutions In addition to financial restructuring, enterprises need to implement a number of measures such as: Strengthening cost control; improving asset use efficiency; enhancing revenue growth; expanding production scale; promoting skills for technical staff 5.3 Recommendation on conditions for the implementation of measures to set up financial structures for improving profitability in construction companies on the Vietnamese securities market 13 5.3.1 For the State and Line Agency To establish reasonable financial structure of listed construction companies, the State and line agencies, particularly Ministries, sectors, localities, line agencies should pay attention to a number of issues such as: the project is expected to be constructed in the year in the locality; When having enough new capital for bidding or construction; Building unit price of raw materials close to the market, especially when the market has strong price fluctuations; Improving procedures for checking and accepting payment for enterprises; handling of weak design units; Investors should cooperate with the bank to support business loans when necessary 5.3.2 For the Association of Vietnamese Construction Contractors The Association of Vietnamese Construction Contractors plays a very important role in improving the efficiency of production and business, increasing the profitability for enterprises in the following ways: Recommendations, consultancy, comments with the state agencies on the construction management policy, mechanism which is inappropriate and detrimental to the construction enterprises and badly affect the general development of the society; To connect business development and business cooperation, linking and exchanging science and technology, experience in management organization to improve business efficiency, consultancy and guidance for construction enterprises The new policy of the State is related to the construction sector, introducing enterprises to build advanced technologies that bring about high efficiency in business 5.3.3 For the Stock Exchanges The Stock Exchanges need to create favorable conditions for enterprises such as: Strengthening the supervision function for listed companies, having strong measures for enterprises to deliberately cheat on information and provide slow information affects investors; Stock exchanges should make more calculations of the average economic indicators of the industry, from which companies can compare their position to improve themselves 5.3.4 For the listed construction companies Listed construction companies are the main factor, and the most important thing is to set up the financial structure to improve profitability, so they need to: recognize the importance of financial structure that directly affect business performance and business risk of the business Therefore, establishing a reasonable financial structure is a prerequisite for increasing profitability in the enterprise It is advised to pay attention to the impact of other factors affecting the profitability, from which measures are addressed promptly LIST OF PUBLICATIONS RELATED TO THE DISSERTATION WRITTEN BY THE DOCTORAL CANDIDATE Le Thi Nhu (2016a) ‘'Theoretical Studies on Capital Structure in Enterprises”, Journal of Finance Business Administration, Issue No (Sep., 2016), p 35-41 Le Thi Nhu (2016b) ‘Factors influencing the financial structure of listed construction companies in Vietnam, Journal of Asia-Pacific Economic Affairs, Issue No 483, December, 2016, p 23-25 Le Thi Nhu (2016c) “Impact of capital structure on profitability in enterprises", Proceedings of the workshop on creative accounting science: perspective from accounting and management, Quy Nhon University, Ho Chi Minh City Economic Publishing House, 2016, p 90-99 Le Thi Nhu (2016d) “Study on Profitability of Listed Firms in Vietnam", Proceedings of the National Workshop: Auditing and Accounting as Vietnam joins TPP and AEC, National Economics University, National Economics University Publishing House, volume 1, pages 455-462