MINISTRY OF EDUCATION AND TRAINING THE STATE BANK OF VIETNAM HO CHI MINH UNIVERSITY OF BANKING VŨ PHẠM TRUNG HIẾU THE IMPACT OF PROFITABILITY ON CAPITAL STRUCTURE AND TARGET CAPITAL STRUCTURE ADJU[.]
MINISTRY OF EDUCATION AND TRAINING THE STATE BANK OF VIETNAM HO CHI MINH UNIVERSITY OF BANKING VŨ PHẠM TRUNG HIẾU THE IMPACT OF PROFITABILITY ON CAPITAL STRUCTURE AND TARGET CAPITAL STRUCTURE ADJUSTMENT SPEED: THE EMPIRICAL STUDY OF LISTED COMPANIES ON THE VIETNAM STOCK EXCHANGE GRADUATION THESIS Major: FINANCE – BANKING Code: 34 02 01 HO CHI MINH CITY, 2022 Tai ngay!!! Ban co the xoa dong chu nay!!! MINISTRY OF EDUCATION AND TRAINING THE STATE BANK OF VIETNAM HO CHI MINH UNIVERSITY OF BANKING Student: VŨ PHẠM TRUNG HIẾU Student ID: 050606180115 Class: HQ6 – GE04 THE IMPACT OF PROFITABILITY ON CAPITAL STRUCTURE AND TARGET CAPITAL STRUCTURE ADJUSTMENT SPEED: THE EMPIRICAL STUDY OF LISTED COMPANIES ON THE VIETNAM STOCK EXCHANGE GRADUATION THESIS Major: FINANCE – BANKING Code: 34 02 01 SUPERVISOR: Ph.D DƯƠNG THỊ THUỲ AN HO CHI MINH CITY, 2022 TÓM TẮT Chủ đề cấu trúc vốn thu hút nhiều nhà nghiên cứu nhà làm sách, đặc biệt nhà hoạch định tài doanh nghiệp cổ phần, đặc biệt kể từ nghiên cứu Modigliani & Miller (1985) Cấu trúc vốn khái niệm tài phản ánh phối hợp vốn chủ sở hữu nợ mà doanh nghiệp sử dụng, điều tạo chi phí sử dụng vốn Hầu hết doanh nghiệp dù thuộc nhóm ngành muốn giữ chi phí vốn mức tối thiểu, từ tối đa hóa giá trị doanh nghiệp chi phí vốn ảnh hưởng gần đến hoạt động doanh nghiệp, từ tính khả thi dự án, khoản đầu tư đến kết kinh doanh rủi ro tài mà doanh nghiệp phải đối mặt Chính thế, việc lựa chọn cấu vốn tối ưu vốn chủ sở hữu nợ vay nghệ thuật nhà quản trị tài Mục tiêu nghiên cứu tìm hiểu tác động cấu trúc vốn đến hiệu kinh doanh doanh nghiệp phi tài niêm yết thị trường chứng khốn Việt Nam cách công ty điều chỉnh cấu trúc vốn mục tiêu Bài nghiên cứu xây dựng dựa lý thuyết đánh đổi cấu trúc vốn lý thuyết trật tự phân hạng Tác giả kiểm định xem lý thuyết có phù hợp áp dụng vào doanh nghiệp Việt Nam hay khơng Nghiên cứu chạy hồi quy theo mơ hình Pooled OLS, mơ hình tác động ngẫu nhiên (REM) mơ hình tác động cố định (FEM) để kiểm định, so sánh nhằm tìm mơ hình phù hợp thơng qua kiểm tra tượng đa cộng tuyến, tương quan tự động phương sai thay đổi Từ đó, phân tích nhân tố ảnh hưởng đến cấu trúc vốn doanh nghiệp phi tài thị trường chứng khoán Việt Nam Cuối cùng, tốc độ điều chỉnh tỷ lệ nợ mức mục tiêu kiểm định mơ hình tĩnh Pooled OLS mơ hình động GMM để kiểm định tính đồng nghiên cứu Thống kê mơ tả cho thấy địn bẩy tài chiếm 36,9% cấu nguồn vốn doanh nghiệp phi tài chính, địn bẩy tài chiếm ưu đòn bẩy ngắn hạn Tốc độ điều chỉnh cấu trúc vốn mục tiêu xác định cách sử dụng nhóm OLS GMM để đảm bảo tính chắn phát Tơi quan sát i thấy khả sinh lời cấu tài sản có quan hệ ngược chiều với địn bẩy quy mô công ty chắn thuế phi nợ có quan hệ thuận chiều với địn bẩy Kết hồi quy cho thấy khả sinh lời có mối quan hệ ngược chiều với tỷ lệ nợ quy mơ hội tăng trưởng lại tỷ lệ thuận với tỷ lệ nợ Tốc độ điều chỉnh cấu trúc vốn cơng ty phi tài 32,7%, tương đương với nghiên cứu công ty phi tài thực hầu phát triển Từ khóa: Địn bẩy tài chính, Kết kinh doanh, Cấu trúc vốn mục tiêu, Tốc độ điều chỉnh ii ABSTRACT The topic of capital structure has always attracted a lot of researchers and policymakers, especially from the financial planners of joint-stock enterprises, especially since the research of Modigliani & Miller (1985) Most businesses regardless of industry group want to keep the cost of capital to a minimum, and thereby maximize the value of their business because the cost of capital affects nearly all activities of the business, from the feasibility of projects or investments to business results and also the main load risks that businesses face Therefore, choosing an optimal capital structure between equity and debt is an art for financial managers The main objective of this study is to understand the impact of capital structure on the business performance of non-financial firms listed on Vietnamese stock exchanges and how these companies adjust their target capital structure The research is built based on the trade-off theory and pecking order theory We test whether these theories are relevant when applied to enterprises in Vietnam The study runs regression according to Pooled OLS model, the random effect model (REM), and the fixed effect model (FEM) to test and compare to find a suitable model through checking multicollinearity, automatic correlation and variance change From there, analyze the factors affecting the capital structure of non-financial enterprises on the Vietnamese stock market Finally, the speed of adjusting the debt ratio to the target level is tested by the Pooled OLS static model and the GMM dynamic model to test the homogeneity of the study The descriptive statistics show that leverage constitutes 36,9% of the capital structure of non-financial firms, while leverage is dominated by short-term leverage The speed of adjustment to the target capital structure is determined using both pool OLS and GMM to ensure the robustness of the finding I observed that profitability and asset structure were negatively related to leverage while the size of the firm and nondebt tax shield were positively related to leverage The regression results also give found that while profitability has a negative relationship with the debt ratio, size and iii growth opportunities are directly proportional to the debt ratio The adjustment speed of the capital structure of non-financial firms is now 32.7% which compares well with studies on non-financial firms done in most developed countries Keywords: Financial leverage, Business results, Target capital structure, Adjustment speed iv PLEDGE I reaffirm the thesis " THE IMPACT OF PROFITABILITY ON CAPITAL STRUCTURE AND TARGET CAPITAL STRUCTURE ADJUSTMENT SPEED: THE EMPIRICAL STUDY OF LISTED COMPANIES ON THE VIETNAM STOCK EXCHANGE " is my article and there are no copies from other authors' material This thesis is the author's research work, the research results are honest, in which there are no previously published contents or the content made by others except for citations fully cited in the thesis I will take full responsibility for my pledge Author Vu Pham Trung Hieu v THANK YOU First, I would like to thank all the teachers at the Banking University of Ho Chi Minh City for providing and supporting me with the necessary knowledge during my study at the school Such knowledge is the luggage that helps me to complete the thesis In particular, I would like to thank my instructor, PhD Duong Thi Thuy An, who helped me in the process of completing my thesis as well as guiding me to correct my shortcomings I would also like to thank my family and friends who have been by my side and supported me during this time Due to limited practical experience and time, the thesis cannot avoid errors I look forward to receiving your comments so that I can complete my thesis Finally, I would like to wish the teachers of the Banking University of Ho Chi Minh City, have a lot of health and achieve much success in work as well as in life Author Vu Pham Trung Hieu vi TABLE OF CONTENTS ABSTRACT…………………………………………………………………… ……iii PLEDGE…………………………………………………………………………….…v THANK YOU…………………………………………………………………………vi TABLE OF CONTENTS……………………………………………………… ….vii LIST OF ABBREVIATIONS……………………………………………… ……….x LIST OF TABLES……………………………………………… ………………….xi CHAPTER 1: OVERVIEW OF THESIS 1.1 Research background 1.2 Research objectives 1.3 Research questions 1.4 Research subject and scope 1.5 Research method 1.6 Research contribution 1.7 Thesis structure CHAPTER 2: LITERATURE REVIEW 2.1 Theoretical background 2.1.1 The Modiligani & Miller theory (M&M theory) 2.1.2 The pecking order theory 2.1.3 The trade-off theory 2.1.4 The market-timing theory 10 vii 2.1.5 The signaling theory 10 2.1.6 The agency cost theory 11 2.2 Overview of previous research 11 2.2.1 Empirical evidences of the capital structure theory 11 2.2.2 Empirical studies on the determinants of the capital structure 13 2.2.3 Empirical studies on the determinants of the speed of adjustment 19 2.3 Differences from previous studies 21 2.4 SUMMARY CHAPTER 22 CHAPTER 3: RESEARCH METHOD 23 3.1 Research study 23 3.2 Data description 25 3.2.1 Data and sample 25 3.2.2 Independent variables 26 3.2.3 Dependent variables 28 3.3 Expected research models 28 3.3.1 Fixed effects model (FEM) 28 3.3.2 Random effects model (REM) 29 3.3.3 Model tests 30 3.4 SUMMARY CHAPTER 31 CHAPTER 4: RESEARCH RESULT 32 4.1 Descriptive statiscal analysis 32 4.2 Checking for model defects 34 viii Appendix 4: GLS – FEM – REM regression results for the variable LEV GLS regression model with dependent variable LEV 58 FEM regression model with dependent variable LEV 59 REM regression model with dependent variable LEV 60 Appendix 5: GLS – FEM – REM regression results for the variable LEVLT GLS regression model with dependent variable LEVLT 61 FEM regression model with dependent variable LEVLT 62 REM regression model with dependent variable LEVLT 63 Appendix 6: GLS – FEM – REM regression results for the variable LEVST GLS regression model with dependent variable LEVLT 64 FEM regression model with dependent variable LEVLT 65 REM regression model with dependent variable LEVLT 66 Appendix 7: OLS and GMM estimation results of adjustment speed 67 68 69 70 71 72