The impacts of capital structure on firm’s operational efficiency

Proceedings the 10th students scientific research conference Object 142 The impacts of capital structure on firm’s operational efficiency Group sciences: Nguyễn Thị Quỳnh Thi Trịnh Thu Ngân Nguyễn Thị Phương Thảo Phí Minh Huệ Class: AC2015C Science advisor: Đỗ Phương Huyền 478 Proceedings the 10th students scientific research conference 479 Proceedings the 10th students scientific research conference INTRODUCTION Most of enterprises attach much importance to analysis and evaluation the impact of capital structure ontheir operational efficiency The purpose of this study is to find out how capital structure effect on firm’s operation efficiency of joint stock companies listed on Vietnam Stock Market.Company’s size, asset structure, total asset growth and short - term liquidity ratio are controlled variables used in the research.The research uses data from 150 companies on the period from Quarter of 2016 to Quarter of 2017 based on Pooled OLS regression model The result shows that capital structure have negative effect on firm’s operational efficiency, while short-term liquidity, asset structure and total asset growth rate have no effect on firm’s performance There is only one factor has the same direction with enterprise’s performance, that is size of company Thesis statement This thesis studies how capital structure does affect the operational efficiency of companies listed on the Vietnamese stock market Most of companies want to maximize profit and move toward added corporate value Therefore, for an enterprise, it is very important to improve operational efficiency and make decision in selection of investment opportunities This thesis consists chapters Chapter I: Literature Review and Theoretical Framework of Capital Structure and Operational Efficiency Chapter II: Data and Research Methodology Chapter III: Results and Experimental Discussion Chapter IV: Conclusions and Recommendations Rationale Is there an optimal financial structure for each business? If optimal capital structure exists, how does it impacts on corporate value That has always been the subject of debate in the financial community over the past several decades In 1958, Modigliani and Miller[CITATION Mod58 \n \t \l 1033 ] had published their study “The cost of capital, corporation finance and theory of investment” in the American Economic Review The result showed that with perfect condition of capital market without tax, no transaction cost, no existence of asymmetric information and if market 480 Proceedings the 10th students scientific research conference expectations are identical, the value of company is independent from capital structure The study above contributed to the formation of modern capital structure theories In fact, successful managers who can determine the optimal capital structure by minimize company financial cost and maximize company profit As can be seen, capital structure affects on firm’s operational efficiency However, the empirical evidence about relationship between capital structure and firm’s performance in Vietnam is not much and has some limitations Within the scope of personal knowledge, author has implemented the topic “The impacts of capital structure on firm’s operational efficiency” From that, the author examine the impact of some factors such as company’s size, asset structure, total asset growth and short - term liquidity ratio to operational efficiency as well as the influence of capital structure on performance of companies that listed on Hanoi Stock Exchange and Ho Chi Minh City Stock Exchange Significance The finding of this study shows the empirical evidence on the relationship between capital structure and firm's operational efficiency in Vietnam The author provides some evidence to prove that capital structure have negative effect on company’s performance This study also suggests some recommendation for Competent Authorities and Enterprises CHAPTER1: LITERATURE REVIEW AND THEORETICAL FRAMEWORK OF CAPITAL STRUCTURE AND OPERATIONAL EFFICIENCY An overview of Capital structure Capital structure is the way a company finances itself by mixing long- term debt, short- term debt and equity[CITATION Ros05 \t \l 1033 ];[CITATION Hsi09 \t \l 1033 ] It refers to the way that the company finances its overall operations and growth by using different sources of funds There are some factors that can cause the change of capital structure, such as age of company, company size, asset structure, profitability, company growth, company risk and liquidity[CITATION AlN08 \t \l 1033 ] However, whether or not an optimal capital structure exists is one of the most important and complex issues in corporate finance An optimal capital structure of a company is the best debt- to- equity ratio that maximizes company’s value It offers a 481 Proceedings the 10th students scientific research conference balance between ideal debt- to- equity range and minimizes the firm’s cost capital Therefore, the firm must consider risk, tax position financial flexibility and managerial conservatism or aggressiveness because these factors are very crucial in determining capital structure target Moreover the operation conditions also may cause the actual capital structure differ optimal capital structure The important decision for any firm is a decision about appropriate capital structure It is not only because of the need maximizes profit for organization, but also is for organization’s complete ability The first opinion about capital structure was researched by Modigliani and Miller[CITATION Mod58 \n \t \l 1033 ] It refers that optimal capital structure exist which balance the risk of bankruptcy with the tax savings of debt Once established, this capital structure should provide greater return for stock holder than they would receive from all-equity firm In theory, the modern financial technical would allow manager to calculate relation between debt and equity of each firm However, in practice, there are many studies which found that the most companies not have optimal capital structure Capital structure is the combination of the debt and equity of a firm It can also be known as the way that a firm finances it through some combinations of debt and equity The various composition of a firm’s capital structure according to Inanga and Ajayi[CITATION Ina99 \n \t \l 1033 ] may be classified into parts Those are equity capital, preference capital and long- term loan (debt) capital Equity capital is the contributed capital, money originally invested in the business in exchange for share of stock, and retained profits, profit from past years that have been kept by the company to strengthen the balance sheet, growth, acquisition and expansion business Preference capital is the mixture that combines the features of debentures and shares except the benefit Debt capital refers to the long- term debt that company used to finances its investment decisions while coming up with its principal and also paying back interest Theoretical Framework of Capital Structure: The irrelevance theorem[CITATION Mod58 \t \l 1033 ]has come to be one of the most important studies within the area of capital structure They stated that the value of a company did not depend on its financial system in competitive capital markets without bankruptcy costs, corporate income tax or other market risks In 1963, 482 Proceedings the 10th students scientific research conference when Modigliani and Miller[CITATION Mod58 \n \t \l 1033 ] assumed the corporate income tax and they recognized that the value of a levered firm was equal to the value of an unlevered firm plus the present value of the "tax shield" The M&M theory considered the advantages of the tax shield However, the argument about maximizing debt ratio to benefit from tax shield was not appropriate because it did not care about the bankruptcy costs, the asymmetric information as well as the agency cost that might occur when lending From the limitations of M&M theory, many other investigations have been developed to build modern capital structure theories The ability of businesses fall into bankruptcy which depends on not only the business risk but also the policy of mobilizing, managing, operating and using capital of enterprises The trade-off theory was developed by Kraus and Litzenberger[CITATION Kra73 \n \t \l 1033 ], considered that the capital structure of an enterprise affect in both cost and benefit sides A company would borrow until the marginal benefit of the tax reduction (tax shield from the debt) was equal to the increase in the present value of the bankruptcy costs Another research, the pecking order theory, which was supported by Myers and Majluf [CITATION Mye84 \n \t \l 1033 ] when they examined the asymmetric information that existed between managers, shareholders, and investors This theory pointed out that there is no optimal capital structure for a company and that it explained the prioritization of capital sources and loans when business mobilize capital It means the companies would like to fund themselves firstly with internal resources, then with loans, and eventually with the equity provided by shareholders Agency cost theory which provided by Jensen and Meckling [CITATION Jen76 \n \t \l 1033 ] is discussing the expenses that derived from the conflict of interest between principals (shareholders) and decision makers (agents) of firms (managers, board members, and so on), this occurred because of divergences in executive decisions This costs concurrent related to the argument between shareholders and creditors when the company's debt increased and shareholders received benefits in case of bankruptcy 1.1.1 The capital structure theory of Modigliani and Miller (M&M) The Modigliani-Miller Theory (M&M) is the first theory of capital structure It is the fundamental and modern philosophy of capital structure, which states that 483 Proceedings the 10th students scientific research conference capital structure does not influence company's value This suggests that the valuation of a firm is irrelevant to the capital structure of a company Whether a firm is highly leveraged or has lower debt component in the financing mix, it has no bearing on the value of a firm The capital structure theory of M&M is based on the following key assumptions: There are no taxes Transaction cost for buying and selling securities as well as bankruptcy cost is zero There is symmetry of information This means that an investor will have access to same information that a corporate would and investors would behave rationally The cost of borrowing is the same for investors as well as companies Debt financing does not affect debt on a company's earnings before interest and taxes Proposition 1: In the assumptions of “no taxes”, the capital structure does not influence the valuation of a firm In other words, raising the capital structure does not increase the market value of the company The profits are equal between the debt holders in the company and equity shareholders Proposition 2: In the assumptions of "no bankruptcy costs", cost of capital effect on capital structure which refers that borrowing gives tax advantage, because the interest will deduct from the tax which result what is known as tax shields, which in turn reduce the cost of debt and then maximize the firm performance 1.1.2 Trade- off theory: Trade-off theory aims to explain the fact that corporations usually are financed partly by debt and partly by equity An important reason why the businesses cannot get enough capital is that because of having benefits from the debt shield The use of debt finance also generates the highest cost This is financial exhaustion which has components: 1) costs that arise when financial exhaustion or bankruptcy; and 2) the possibility of financial exhaustion and bankruptcy These costs include direct costs and indirect costs With each percentage point increase in debt, while the benefits of the tax shield increase, the cost of financial exhaustion also increases It will come at a time, when each unit of debt increases, the benefits from the tax shield are no higher than the cost of financial exhaustion, debt is no longer beneficial for business Therefore, companies 484 Proceedings the 10th students scientific research conference are always looking to optimize the total value of the business based on this balance to determine how much debt and how much equity to choose in their capital structure Trade-Off theory suggested by Myers[CITATION Mye841 \n \t \l 1033 ] emphasize a balance between tax saving arising from debt, decrease in agency cost and bankruptcy and financial distress costs The Trade-Off theory is the oldest theory and connected to the theory from Miller and Modigliani on capital structure that emphasize on optimal capital structure Kraus and Litzenberger[CITATION Kra73 \n \t \l 1033 ] commented that the optimal financial leverage represents a trade- off between the tax benefits of debt and the cost of bankruptcy According to Myers[CITATION Mye841 \n \t \l 1033 ], an enterprise that follows the static tradeoff theory establishes a debt ratio based on target corporate value and gradually adjusts for that goal This target rate is determined by balancing the benefits from the tax shield for debt and bankruptcy costs The Trade-off theory is an important one while studying the Financial Economics concepts The theory describes that the companies or firms are generally financed by both equity and debt The Trade-off theory of capital structure refers to the idea that a company chooses how much debt finance and how much equity finance to use by balancing the costs and benefits Trade-off theory of capital structure basically entails offsetting the costs of debt against the benefits of debt 1.1.3 Pecking Order Theory In corporate finance, pecking order theory (or pecking order model) postulates that the cost of financing increases with asymmetric information Financing comes from three sources, internal funds, debt and new equity When a company need cash for a new investment companies prioritize their sources of financing, first preferring internal financing, and then debt, lastly raising equity as a "last resort" According to Myers[CITATION Mye841 \n \t \l 1033 ], due to adverse selection, firms prefer internal to external finance When outside funds are necessary, firms prefer debt to equity because of lower information costs associated with debt issues The theories based on the asymmetry information between manager and investor In three funds, retained earnings have no adverse selection problem Equity is 485 Proceedings the 10th students scientific research conference subject to serious adverse selection problems while debt has only a minor adverse selection problem If there is an inadequate amount of retained earnings, then debt financing will be used Thus, for a firm in normal operations, equity will not be used and the financing deficit will match the net debt issues Managers are more understandable about the real value and the risk of business than investors that affect to decision of the investor.Company just issue stock when their stock value is higher than internal stock value Therefore, when the company announced information about issuing stock, they will send to investor a message about this problem Then, the market appear a lot of issuing information and it is a bad signal for development of enterprise and it leads to reduce stock price Therefore, to avoid the reducing stock price, company will not issue the new equity 1.1.4 Agency cost theory: Agency cost is a type of cost that arise when an organization gets a problem of lack of agreement between the purpose of manager and the owner and the information asymmetry Management can not make decision in profit of the owner or damage to those rights For example, instead of increase the value of company, manager use money for his purpose In order to solve this problem, the owner find the approach to control and ensure that manager actions are in line with their interests such as requirements on annual reports annual meeting, and bonus for directors based on management effectiveness Therefore, the conflict between manager and owner increase agency cost The better the enterprise is managed, the lower agency costs Using debt increase that leads to reduce agency cost As the debt ratio rises, manager will have to more cautions about new debt and using capital decision will helps they manage their organization more effective Agency cost of debt capital occurs when the information asymmetry between organization and the business and creditors The owner of business are shareholders who have rights to decide about business operation while the creditors give the business loan and they can not vote in the shareholder meeting When a company take part in an investment project that shareholders are more profitable than the creditors, 486 Proceedings the 10th students scientific research conference the more asymmetric information between business and creditors, the more agency costs For example, when shareholder and creditor want to invest in a project,they have to trade-off between risk and profit If it is high-risk project, it will create much profit for shareholder but it increase the probability to bankruptcy for the creditors Agency costs theory illustrate that agency cost of equity has the positive related with the debt ratio, but agency costs of debt capital directly related to business financial leverage Literature review: Since M&M theory has been published, there are many researchers still studying the relationship between capital structure and operational efficiency Not only in foreign countries, but also in Vietnam, there are many articles on this subject 1.1.5 International literature review: Phillips and Sipahioglu [CITATION Pau07 \n \t \l 1033 ]had a research about relationship between capital structure and operational efficiency To this research, they followed “Theoretical Framework of Capital Structure” of Franco Modigliani and Merton Miller (M & M)[CITATION Mod58 \n \t \l 1033 ] and using data from collected from 43 UK quoted organizations which possess an interest in owning and managing hotels to test this theory And their finding was similar to M&M theory, in other words, capital structure not related to operational efficiency Moreover, Iorpev and Kwanum[CITATION Ior12 \n \t \l 1033 ]also study the relationship between capital structure and operational efficiency of manufacturing companies listed on the Nigerian Stock Exchange They covered a period of five years from 2005- 2009 The result concludes that capital structure is not a main determinant of firm’s operational efficiency In other research of Shyu [CITATION Jon13 \n \t \l 1033 ] (Department of Business Administration, National Taiwan University of Science and Technology, Taiwan, Republic of China), he focused on Taiwanese group‐affiliated firms His study seeks to examine how agency problems and internal capital markets in group‐affiliated firms are mutually influenced by the ownership structure, capital structure, and performance Like other above studies, he found that the capital structure decisions of group‐affiliated firms are independent of firm performance 487 Proceedings the 10th students scientific research conference BIBLIOGRAPHY Abbasali Pouraghajan, Esfandiar Malekian and Milad Emamgholipour, Vida Lotfollahpour & Mohammad Mohammadpour Bagheri (2012) The Relationship between Capital Structure and Firm Performance Evaluation Measures: Evidence from the Tehran Stock Exchange International Journal of Business and Commerce, 166-181 Al-Najjar, B., & Taylor, P (2008) The Relationship between Capital Structure and Ownership Structure: New Evidence from Jordanian Panel Data Managerial Finance Journal, 919-933 Awais, M., Iqbal, W., Iqbal, T., & Khursheed, A (2016) IMPACT OF CAPITAL STRUCTURE ON THE FIRM PERFORMANCE: COMPREHENSIVE STUDY OF KARACHI STOCK EXCHANGE Sci.Int.(Lahore), 501-507 Chinaemerem, O C., & Anthony, O (2012) IMPACT OF CAPITAL STRUCTURE ON THE FINANCIAL PERFORMANCE OF NIGERIAN FIRMS Arabian Journal of Business and Management Review, 43-61 Cuong, N T (2014) Threshold Effect of Capital Structure on Firm Value: Evidence from Seafood Processing Enterprises in the South Central Region of Vietnam International Journal of Finance & Banking Studies , 3(3) Dr Nour Abu-Rub and Dr Suleiman M Abbadi (2012) The Effect of Capital Structure on the Performance of Palestinian Financial Institutions British Journal of Economics, Finance and Management Sciences, 92-101 Fosu, S (2013) Capital structure, product market competition and firm performance: Evidence from South Africa Hsiao (2009) in Literature Review On The Concept Of Capital Structure Finance Essay Retrieved April 2018, from UKEssays.com: http://www.ukessays.com/dissertation/literature-review/the-concept-of-capital structure.php#Ixzz2zauL4MD n Inanga, E L., & Ayaji (1999) Accountancy Lagos: The CIBN Press Limited 10 Iorpev, L., & kwanum, I M (2012) Capital Structure and Firm Performance: Evidence from Manufacturing Companies in Nigeria International Journal of Business and Management Tomorrow, 1-17 515 Proceedings the 10th students scientific research conference 11 Jensen, M C., & Meckling, W H (1976) THEORY OF THE FIRM: MANAGERIAL BEHAVIOR, AGENCY COSTS AND OWNERSHIP STRUCTURE Journal of Financial Economics 3, 305-360 12 Kinsman, M., & Newman, J (1998) Debt tied to lower firm performance: Finding calls for review of rise in debt use Pepperdine University 13 Kraus, A., & Litzenberger, R H (1973) A State-Preference Model of Optimal Financial Leverage The Journal of Finance, 911-922 14 Lawal Babatunde Akeem, Edwin Terer K, Monica Wanjiru Kiyanjui and Adisa Matthew Kayode (2014) Effects of Capital Structure on Firm’s Performance: Empirical Study of Manufacturing Companies in Nigeria Journal of Finance and Investment Analysis, 39-57 15 Le, V T., & Phung, N D (2013) Capital Structure and Firm Performance: Empirical Evidence from Vietnamese Listed Firms 16 Mesquita, J M., & Lara, J E (2015, September 7) CAPITAL STRUCTURE AND PROFITABILITY: THE BRAZILIAN CASE Retrieved April 2018, from researchgate.net: https://www.researchgate.net/publication/265235369_CAPITAL_STRUCTURE_ AND_PROFITABILITY_THE_BRAZILIAN_CASE 17 Modigliani, F., & Miller, M H (1958) The cost of capital, Corporation finance and the theory of investment The American Econimic review, 261-297 18 Myers, S C (1984) The capital structure puzzle The journal of finance, 574-592 19 Myers, S C., & Majluf, N S (1984, July) Corporate financing and investment decisions when firms have information that investors not have The Journa of Financel, 187-221 20 Oanh, T T (2017) Cau truc von va hieu qua hoat dong cua doanh nghiep Viet Nam: tiep can bang hoi quy phan vi Kinh te va phat trien, 60-70 21 Phillips, P A., & Sipahioglu, M A (2004) Performance implications of capital structure: evidence from quoted UK organisations with hotel interests The Service Industries Journal, 31-51 22 Phuc, D N (2014) anh huong cua cau truc von den hieu qua hoat dong kinh doanhcua doanh nghiep sau co phan hoa o Viet Nam Nhung van de kinh te va chinh tri the gioi, 72-80 516 Proceedings the 10th students scientific research conference 23 Quyen, T (2016) Luan an tot nghiep Luan an tot nghiep 24 Ross, S A., Westerfield, R W., & Jaffe, J (2005) in Literature Review On The Concept Of Capital Structure Finance Essay Retrieved April 2018, from UKEssays.com: http://www.ukessays.com/dissertation/literature-review/the- conceptof-capital-structure.php#ixzz2zauL4MDn 25 Shyu, J (2013) Ownership structure, capital structure, and performance of group affiliation: Evidence from Taiwanese group‐affiliated firms Managerial Finance, 404-420 26 Son, T H (2008) Co cau von va hieu qua hoat dog doanh nghiep Cong nghe ngan hang, 31-35 27 Tianyu, H (2013) The comparison of impact from capital structure to corporate performance between Chinese and European listed firms Jönköping International Business School 28.Tran, M (2017, November 8) Lộ diện khoản lỗ lớn quý Retrieved April 2018, from Cafef.vn: https://translate.google.com/?hl=vi#en/vi/november 517 Proceedings the 10th students scientific research conference APPENDIX A: VARIABLES DESCRIPTIVE STATISTIC Table 6: Variables descriptive statistic for Quarter (from Quarter of 2016 to Quarter of 2017) TDR ROE (%) SIZE 44.053 13.51 TANG GRO FLOO (%) (%) LIQ 13.823 3.348 R Mean 3.4274 45 0.071 22.6263 0.201 0.5 Standard Error 0.2513 0.773 85 13.37 0.6947 1.9764 0.0167 Median 2.78 45.755 39 14.63 15.015 3.9757 1.66 0.5 Mode Standard 0.28 61.73 23.190 02 2.155 0.02 4.43 59.291 1.26 6.036 Deviation Sample 7.5405 56.858 537.79 4.646 20.8402 434.315 3515.4 36.43 0.5003 Variance 178.19 40.36 140.52 32 41.94 0.2503 96 -0.8642 79 2.812 1.2229 88 10.108 13 -2.0045 5.772 2.55E- Skewness -7.419 -0.0283 35.63 1.3213 1115.67 17 Range 204.32 72 94.24 - 70.61 Kurtosis 96.21 4.122 99.568 Minimum -145.92 0.07 0.02 1016.1 0.18 Maximum 58.4 3084.6 96.28 39648 39.76 94.26 20363.6 12441 70.79 3013 39 18 12163 49 35 900 900 900 900 900 900 Table 7: Variable descriptive statistic for Quarter of 2016 450 900 Sum Count TDR Mean ROE 3.869 (%) 45.193 SIZE 13.4230 518 TANG GRO (%) 22.7705 (%) 16.2224 FLOO LIQ 3.233 R 0.5 Proceedings the 10th students scientific research conference 0.588 0.531 Standard Error 1.8266 0.1411 1.7560 6.4661 0.0410 Median 3.32 46.825 13.3267 14.9 2.64 1.75 0.5 Mode Standard 1.45 6.512 41.51 22.370 #N/A 3.41 #N/A 2.33 Deviation Sample 42.41 500.44 1.7277 21.5063 462.519 79.1935 6271.61 7.2 51.85 0.5017 Variance 31 35.21 - 2.9851 61 59.99 0.2517 - Kurtosis 93 4.121 0.8909 - 5.3999 1.2559 75.2559 99 7.259 2.0272 4.38E- 0.0426 -0.7039 1.3455 7.6699 927.501 78 17 74.83 93.6 14.7637 94.23 - 70.42 Minimum -16.43 0.67 4.1228 0.03 99.5680 827.933 0.37 Maximum 58.4 580.3 94.27 6779.0 18.8865 2013.45 94.26 2433.36 70.79 484.9 150 150 56 150 3415.58 150 32 150 150 75 150 Skewness Range Sum Count 519 Proceedings the 10th students scientific research conference Table 8: Variable descriptive statistic for Quarter of 2016 TDR TANG ROE (%) 3.9861 0.5327 44.654 1.8364 13.4423 0.1415 23.0025 1.7522 Median 3.12 47.52 13.3825 Mode Standard -0.33 Mean Standard Error #N/A SIZE (%) #N/A FLOO GRO (%) LIQ R 13.8604 4.6152 2.9987 0.4387 0.5 0.0410 15.585 2.4397 1.715 0.5 38 0.14 1.31 Deviation 6.5239 42.561 22.4907 1.7331 21.4594 56.5239 5.3733 0.5017 Sample Variance 26.071 505.832 3.0035 460.5071 3194.9541 28.8727 0.2517 -0.9194 5.3909 1.4072 55.9917 -2.0272 3.8907 -0.0605 -0.6928 1.3627 6.8435 6.6755 4.38E-17 66.81 92.99 14.8384 92.01 572 50.72 Minimum -16.18 0.92 4.1318 0.02 -37.72 0.23 Maximum 50.63 93.91 18.9702 92.03 534.28 50.95 Kurtosis Skewness Range 52.117 2016.350 Sum Count 597.91 6698.1 3450.382 2079.053 449.8 75 150 150 150 150 150 150 150 520 Proceedings the 10th students scientific research conference Table 9: Variable descriptive statistic for Quarter of 2016 TDR ROE Mean (%) SIZE TANG GRO (%) (%) FLOO LIQ R 43.6635 13.4637 22.7451 10.1601 3.2893 0.5 1.8775 0.1427 1.7189 3.1489 0.42396 0.0410 Median 3.06 45.3 13.2557 15.4 3.8 1.665 0.5 Mode Standard 3.12 30.46 #N/A #N/A -7.92 1.3 1.7473 21.0517 38.5659 5.1924 0.5017 4.1722 0.527 Standard Error Deviation 6.455 22.9945 26.960 Sample Variance 528.7464 3.0531 443.1753 1487.328 0.2517 -0.8404 5.1890 - 1.2801 36.3380 23.3457 -2.0272 1.9769 -0.0394 0.6569 1.3359 5.2196 4.4842 4.380E-17 66.42 92.47 14.857 92.34 362.706 37.5 -21.95 1.33 4.1504 0.02 -43.4161 0.36 41.6775 12.954 Kurtosis Skewness Range Minimum 19.007 Maximum Sum Count 44.47 93.8 92.36 319.29 37.86 625.83 6549.53 2019.558 3411.7642 1524.0079 493.4 75 150 150 150 150 150 150 150 521 Proceedings the 10th students scientific research conference Table 10: Variable descriptive statistic for Quarter of 2016 TDR ROE (%) SIZE TANG GRO FLOO (%) (%) LIQ R 13.463 Mean Standard Error 4.1722 43.6635 22.7451 10.1601 3.2893 0.5 0.5271 1.8775 0.1427 13.255 1.7189 3.1489 0.4240 0.0410 Median 3.06 45.3 15.4 3.8 1.665 0.5 Mode Standard 3.12 30.46 -7.92 1.3 Deviation 6.4558 41.677 22.9945 1.7473 21.0517 38.5659 5.1924 26.960 0.5017 Sample Variance 12.954 528.7464 3.0531 443.1753 1487.328 23.345 0.2517 -0.8404 5.1890 - 1.2801 36.3380 -2.0272 1.9769 -0.0394 0.6569 14.857 1.3359 5.2196 4.4842 4.38E-17 66.42 92.47 92.34 362.7061 37.5 Minimum -21.95 1.33 4.1504 0.02 -43.4161 0.36 Maximum 44.47 93.8 19.0074 92.36 319.29 37.86 625.83 6549.53 2019.558 3411.7642 1524.0079 493.4 75 150 150 150 150 150 150 150 Kurtosis Skewness Range Sum Count #N/A 522 #N/A Proceedings the 10th students scientific research conference Table 11: Variable descriptive statistic for Quarter of 2017 TDR ROE (%) SIZE TANG GRO FLOO (%) (%) LIQ R Mean 3.2423 42.2845 13.4692 22.4993 9.7017 4.1908 0.5 Standard Error 0.3101 1.9197 0.1440 1.6684 2.2907 0.6238 0.0410 Median 2.475 44.065 13.3131 15.1577 3.1098 1.71 0.5 Mode Standard 7.23 50.44 14.2113 0.02 5.55 1.16 3.7979 14.423 23.5116 1.7640 20.4332 28.0547 7.6394 58.361 0.5017 552.795 3.1116 417.5144 787.0660 23.900 0.2517 Kurtosis 4.5096 -0.8692 4.7794 1.3985 15.5962 -2.027 4.38E- Skewness 0.9116 -0.0197 -0.6105 1.3580 3.0418 4.5572 17 Range 32.72 94.14 14.8012 91.5 227.97 57.52 Minimum -10.9 0.07 4.2468 0.02 -30.28 0.48 Maximum 21.82 94.21 19.0480 2020.38 91.52 197.69 58 486.34 6342.67 3374.892 1455.253 628.62 75 150 150 150 150 150 150 150 Deviation Sample Variance Sum Count 523 Proceedings the 10th students scientific research conference 12: Variable descriptive statistic for Quarter of 2017 TDR ROE (%) Mean Standard Error Median Mode Standard 3.0253 44.1681 0.4170 1.9418 2.73 45.8 0.32 63.39 Deviation 5.1070 26.081 Sample Variance Kurtosis Skewness Range Minimum Maximum Sum Count SIZE 13.6529 TANG GRO (%) (%) FLOO LIQ R 22.3615 14.8447 3.0467 0.5 0.2327 1.6716 3.7145 0.3454 0.0410 13.4225 14.71326 5.8145 1.545 0.5 14.6302 10.57 0.58 1.16 23.7826 2.8494 20.4724 45.4925 4.2301 17.894 0.5017 11.002 565.6140 8.1191 419.1197 2069.571 10.625 0.2517 - -0.8912 47.8068 1.1795 43.1806 -2.0272 0.2415 -0.0470 4.8771 1.3063 5.8324 3.27 4.38E-17 48.1 93.76 35.5236 92.15 439.71 22.46 -22.76 2.18 4.2364 0.02 -38.51 0.18 25.34 453.79 95.94 39.76 2047.940 92.17 401.2 22.64 6625.21 3354.2212 2226.7037 457 75 150 150 150 150 150 150 150 524 Proceedings the 10th students scientific research conference Table 13: Variable descriptive statistic for Quarter of 2017 TDR ROE (%) SIZE TANG GRO FLOO (%) (%) LIQ 18.1541 6.9970 7.0278 0.3278 3.3303 0.4826 1.57 1.18 0.5 0.0410 0.5 R 13.635 Mean Standard Error Median Mode Standard 2.2694 1.0748 2.51 4.6 44.3575 1.9771 45.49 31.13 0.2267 14.6735 22.3788 1.6679 14.635 1.65 Deviation 13.1639 173.287 24.2139 2.7762 20.4281 85.6956 5.9105 0.5017 586.3112 7.7074 417.3060 7343.7418 34.9336 0.2517 Sample Variance 13.4654 27.513 Kurtosis 109.6119 -0.7929 31.9597 1.1266 125.4816 -2.0272 3.2353 1.2654 91.06 10.7610 1050.07 4.9119 42.98 4.4E-17 0.02 91.08 -33.96 1016.11 2723.109 0.47 43.45 3356.8223 150 150 499.54 150 75 150 - Skewness Range 9.5342 183.03 - 0.0412 94.71 Minimum Maximum 145.92 37.11 1.57 96.28 Sum Count 340.41 150 6653.62 150 32.3583 4.1817 36.54 2045.316 150 525 Proceedings the 10th students scientific research conference APPENDIX B: TEST MODEL’S RERULTS NOTE: Model 1, model 4, model and model are chosen as the studied models in chapter 3, respectively model 1, 2, and INTERCEPT Model Model Model Model Model Variable 0.0201* TDR (%) * -2.3293 0.0001* SIZE ** 3.9038 0.1339 0.00905*** 0.0108** 0.0139** -2.61585 -2.5527 -2.4658 0.0000009017* 0.00000059372* 0.0000012116* ** 4.94668 ** 5.02965 ** 4.8872 TANG (%) GRO (%) LIQ FLOOR -1.5 0.2900 0.5904 0.54196 0.606 0.5062 1.0585 0.5384 0.61 0.51591 0.665 0.2338 0.3091 0.41659 0.4233 1.1912 1.0177 0.2797 -1.0815 0.0939* 1.6769 0.81272 0.3567 -0.922 0.8012 0.362 -0.912 0.0044 R Square 0.0343 0.0313 0.0305 526 0.0304 Proceedings the 10th students scientific research conference WITHOUT INTERCEPT Model Model Model 0.01127** -2.53933 0.0000000663637** 0.0031*** -2.9624 0.0000000000012759* 0.0039*** -2.8856 0.000000000000715** * 5.45435 ** 7.2 * 7.283 0.69458 0.39278 0.25187 1.14655 0.15986 -1.4067 0.041** 2.0456 0.19757 0.6589 0.4415 0.3568 0.922 0.1996 -1.2836 0.743 0.3279 0.19382 0.193 Variable TDR (%) SIZE TANG (%) GRO (%) LIQ FLOOR R Square 0.2005 -1.281 CORRELATION Model + TDR ROE (%) TANG SIZE FLO (%) GRO (%) ROE - TDR 0.04406 (%) 0.15221 0.21316 SIZE TANG 08 0.02837 94 0.05616 0.083512 97 25 - 0.03088 0.10826 0.093812 0.108643 68 67 - 36 - - 0.00400 0.025753 0.073437 0.025932 56 -0.44975 0.11473 - 44 0.349841 73 0.068219 14 - (%) GRO (%) LIQ FLOOR 527 LIQ 0.1615 OR Proceedings the 10th students scientific research conference 0.13248 07 0.103072 16 17 91 14 82 Model + LI ROE ROE TDR (%) SIZE TANG TDR (%) SIZE TANG (%) GRO (%) Q 0.0440651 0.1522108 0.2131693 0.0561624 (%) 0.0283797 0.08351228 0.1082666 GRO (%) 0.0308868 0.09381264 - -0.1086434 - LIQ 0.0040056 - 0.4497506 0.02575344 0.07343773 0.02593214 Model + ROE ROE TDR (%) SIZE TANG (%) LIQ Model SIZE TANG (%) -0.0440651 0.15221084 0.21316936 0.0283797 0.05616247 0.083512275 0.0040056 -0.4497506 -0.02575344 ROE ROE TDR (%) SIZE TANG (%) GRO (%) TDR (%) TDR (%) SIZE -0.0440651 0.15221084 0.21316936 0.0283797 0.05616247 0.0308868 0.10826665 LIQ -0.07343773 TANG (%) GRO (%) 0.0835123 0.0938126 -0.10864336 Model ROE ROE TDR (%) TANG (%) GRO (%) -0.0440651 0.02837969 0.03088679 TDR (%) 0.056162474 0.108266651 528 TANG (%) -0.1086434 GRO (%) Proceedings the 10th students scientific research conference Objectives: To map and explain the development of capital structure and firm operational efficiency in Viet Nam company during recent periods In detail, writer wants to study relationship between capital structure model and operational efficiency Then writer will help Viet Nam joint stock companies to find suitable capital structure Method, Scope of study: 9.1 Method: Takes data in financial statements from about 120 Viet Nam joint stock companies during quarter ( 4/2016 – 9/2017) 9.2 Scope: the thesis will only focus on companies listed on the Viet Nam Stock Exchange 529 ... and evaluation the impact of capital structure ontheir operational efficiency The purpose of this study is to find out how capital structure effect on firm’s operation efficiency of joint stock... limitations Within the scope of personal knowledge, author has implemented the topic ? ?The impacts of capital structure on firm’s operational efficiency? ?? From that, the author examine the impact of. .. effect on operational efficiency, capital structure has a negative impact on operational efficiency and existing of target capital structure or optimal capital structure for the enterprise At the