UNIVERSITY OF ECONOMICS AND BUSINESS (UEB) FACULTY OF FINANCE AND BANKING GRADUATION THESIS THE IMPACTS OF CAPITAL STRUCTURE ON THE PROFITABILITY OF CONSTRUCTION AND REAL ESTATE ENTERPRISE INDUSTRY ON THE VIETNAM STOCK MARKET Student name: Nguyen Pham Linh Chi Student ID: 19050623 Class: QH2019E TCNH CLC 2 Ha Noi - 2023 UNIVERSITY OF ECONOMICS AND BUSINESS (UEB) FACULTY OF FINANCE AND BANKING GRADUATION THESIS THE IMPACTS OF CAPITAL STRUCTURE ON THE PROFITABILITY OF CONSTRUCTION AND REAL ESTATE ENTERPRISE INDUSTRY ON THE VIETNAM STOCK MARKET Supervisor: Assoc.Nguyen Van Hieu Student name: Nguyen Pham Linh Chi Student ID: 19050623 Class: QH2019E TCNH CLC 2 Ha Noi - 2023 DECLARATION I hereby declare that this graduation thesis is my work, with the support of our supervisor, and has not copied the work of others. This is my research work. The data and secondary information used in the thesis are sourced and clearly cited. This statement is entirely our responsibility.
Students Ab, Nguyén Pham Linh Chi ACKNOWLEDGEMENTS In order to successfully complete this graduation thesis, I would like to sincerely thank to: First of all, we would like to thank my instructor, Assoc.Nguyen Van Hieu, who guided me wholeheartedly throughout the process of conducting this graduation thesis. I thank you for your dedication and willingness to take the time to comment and answer questions about the topic so that I can understand and complete this research paper. I would also like to express our sincere thanks to the teachers in the Faculty of Finance - Banking in particular and all the teachers of the University of Economics - VNU in general for creating learning conditions to help me improve our skills, self-study ability to complete the research well. Due to limited knowledge and reasoning ability, I cannot avoid certain shortcomings.
I look forward to receiving the contributions of teachers to make this graduation thesis better. Thank you sincerely! ii LIST OF ABBREVIATIONS Abbreviations Full name HNX Hanoi Stock Exchange HOSE Hochiminh Stock Exchange ROA Return Of Asset ROE Return Of Equity EPS Earning Per Share WACC Weighted Average Cost of Capital REM Random Effects Model FEM Fixed Effects Model iii LIST OF TABLE Table 3. Description of variables in the research model. Descriptive statistics table of variables Table 4.
Correlation coefficient matrix tabÌe.-- --s--cs++cxsererretretrirtrrkrirerrrrrrrrrke Table 4. Test results for MulticOllinearity. --cs«creerieekirerirrriirrirriirrriiiiirrrrrerree 30 Table 4. Summary table of regression model estimation resuÌtsS.
Table of results of F test Breusch - Pagan LM (1980) .---cec-es 35 Table 4. Estimated results of influencing factors according to Robust Standard Errors model (Robust Standard Errors) .csseessssessecsessesssecseesesseecseensessecseeseesseeseeseeseeeseeaseateeseeseeaseeseeseeaseeseesees 36 iv TABLE OF CONTENTS M3P. «HH HH HH HH H11 g1 gi ii LIST OF ABBREVIATTIONS. 5s cà Hy iii LIST OF TABLE 1n.
iv TABLE OF CONTENTS w. Research subjects and scope Of Study. Overview of data and research methods. Contribution Of research.
Structure Of the Stud. ceccesesssessecssecssecseesstecsteeseecstecstecseesseecseecseecaeesseesseesseesneesateeneesseesueesneesseesees 4 CHAPTER 2: REVIEW OF LITERATURE AND THEORETICAL BASIS. Overview of national and international research 2. The relationship between capital structure and profitability.
18 CHAPTER 3: RESEARCH METHODS. Research 6u ii hố. Data description and data SOUTC. ---csc- sccx+trvtEEkrEExetrttrkrtrkrtrrrrkirrirrrirkrrrrrrrrrrke 25 3.
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Checking for multiCOlÏinearÏfW. Regression model analysis. Testing the choice of research estimation model. The results of overcoming the research model and discussion.
DiSCUSS and COIDATG. «-¡ « se HH HH HH Hà TH Hàn tà Hà Hàn hành phường nhiệt 38 CHAPTER 5: CONCLUSIONS AND RECOMMENDATIONS. Summary of research results. Limitations of the Study.
Further research directions š9335535)00500577.Ỏ 43 References in Eng]iSH.---s-cxxtsrrtrrthhthHH nh nh HH HH HHrtrrktrrrrrrrkrrrke 43 References in VietnaIm.-- «xen Hà Hà Hà Hy HH HH1 HH1 tre Hrìy 44 ,\ad50006. Variable descriptive statÏSfCS.1 Pool OLS Model with ROA representing profitability.2 Pool OLS Model with ROE representing profitability.1 Fixed-effects model FEM with ROA profitable profitability.2 Fixed-effects model FEM with ROE profitable profitability.1 REM with ROA profitable profitability.2 REM with ROE profitable profitability. Hausman test with ROA profitable profitability Appendix 8. Test of variance of variable error with ROA profitable profitability.
Autocorrelation test with ROA profitable profitability. Breusch-Pagan Lagrange multiplier with ROE profitable profitability. Robust Standard Error Model - Robust.-------e-ccesersereereerrrrk 52 CHAPTER 1: INTRODUCTION 1. Research background When it comes to financial management, an important and much-interested research item can refer to capital structure.
Decisions related to capital structure are always very important and crucial for businesses regardless of the industry. Because it affects the competitiveness, as well as the ability to negotiate in the market, the satisfaction of shareholders and investors in the business when the board of directors focuses on the capital structure, towards the ultimate goal. maximize value and profits. Vietnam is a growing market that is a stepping stone, an opportunity for businesses to choose to use funds from different sources.
Deciding which fund to use, the capital structure of each business also changes accordingly. So how will the change of capital structure affect the profitability of each individual enterprise? Therefore, there have been research works both theoretically and experimentally around that question, but none of the results are absolute. Each economy, a different field has its own characteristics, even each business has its own characteristics, so the impact of capital structure on profitability is also different. Construction - Real Estate Industry Real estate is closely related to the socio-economic development of a country, is a "pull" for many other industries to grow together.
In addition, this is an industry with great prospects in Vietnam, an attractive market for investors. Partly because Construction - Real estate is increasingly asserting its position thanks to high profits, thereby attracting newly established businesses, old enterprises to expand their scale, enhance business performance. However, the negative side has formed a "virtual fever" and a "bubble" phenomenon for this market. Facing credit policies with interest rates when saving at only 5-6% per year, it has stimulated a change in investment choices in real estate instead of just depositing money in banks as usual.
investors when the potential for price appreciation can be more profitable than savings, and the ability to preserve value before inflation of real estate. The Construction - Real Estate market in 2021 and 2022 has very positive signals despite the complicated development of the deflationary economy due to the complicated developments of the Covid-19 global pandemic. Real estate prices continued to increase, the average apartment price increased by about 5-7%; the type of individual housing in the project has a price increase of 15-20%; for land plots has increased by 20-30% compared to the end of 2020. Although the price increases, it does not reduce the attractiveness of the real estate industry among investors, which is reflected in the inventory in 2021.
much less than in 2020, while in 2020 there will be about 9,000 apartments remaining, by the end of 2021 there will be only 2,286 apartments, a decrease of 74. Statistics of real estate interest in Hanoi in January 2022 increased 14% over the same period in 2021, in contrast, in Ho Chi Minh City, interest decreased slightly by 1%. It is forecasted that construction activities will grow by 8% in 2022, thanks to the promotion of "offsetting" spending for infrastructure and based on the loosening policy of all levels with the development segment. Notably, as of January 20, 2022, the total foreign investment capital (FDI) registered in Vietnam increased by 4.2% over the same period in 2021, reaching $2.
In which, the real estate business ranked second with a total investment of over 472 million USD, accounting for nearly 22.5% of the total registered investment capital, which has opened up positive signals for this exciting market. These talking numbers have shown the attractiveness of Construction - Real Estate and its position in economic growth. Therefore, enterprises in the industry must increasingly focus on improving operational efficiency, developing more, effectively using financial resources to increase profitability, attracting domestic and foreign investment capital sources. A large amount of capital is required - typical of Construction - Real Estate, that is why most businesses in this industry have a relatively high ratio of loans to total assets.
Research on the impact of capital structure will help the board of directors find the right direction for their business in capital restructuring. Because this is an important issue in the existence and development of an enterprise, there have been many studies on the influence of capital structure on the profitability of the enterprise, but students find that There has been no separate research on enterprises in the Construction - Real Estate industry listed on HNX and HOSE in the period of 2018- 2022. Stemming from the above needs and urgency, students chose to research the topic “The impacts of capital structure on the profitability of construction and real estate enterprise industry on the vietnam stock market”. Research objectives The general objective of the study is research the impacts of capital structure on the profitability of Construction and Real estate enterprise industry on the vietnam stock market period 2018 - 2022.
Specifically, the article systematizes the concepts of capital structure, profitability and theoretical basis related to the impact of capital structure on profitability. Moreover, the article analyze how the current state of capital structure affects the profitability of construction and real estate enterprises listed on the stock market in 5 years from 2018 to 2022; Using the linear regression method by STATA 17 software to examine the direction of impact of capital structure on profitability. Finally, it proposes and develops recommendations to contribute to improving the profitability of enterprises in the industry. Research subjects and scope of study The object of the study is the effect of capital structure on the profitability of enterprises in the construction industry - real estate, listed on the stock market in the period 2018 - 2022.
Scope of space research: Enterprises in the construction industry - real estate, listed on the stock market. Research time scope: Synthesize data collected from financial statements of enterprises for 5 years, from 2018 to 2022. Research question Based on the above purpose, this study aims to answer the following questions: 1. What is capital structure, profitability? 2.
The previous theoretical and experimental works have determined the effect of capital structure on profitability. The direction of impact of capital structure on profitability of construction - real estate enterprises listed on the Vietnam stock market in the period of 2018 - 2022? 4. How should enterprises in the construction - real estate industry listed on the Vietnamese stock exchange structure their capital to improve profitability? 1. Overview of data and research methods To complete the research, students use a combination of qualitative and quantitative research methods.
In particular, the data used in the research is compiled from the audited consolidated financial statements of enterprises in the construction industry - real estate listed on the Vietnamese stock exchange in the five-year period from 2018 to 2022. Then, process these secondary data to suit the research objectives. Finally, thanks to the software to measure, test, and then analyze to produce research results. Contribution of research The study contributes to many different fields.
First, the study analyzes the capital structure and profitability of enterprises in this industry, helping investors and stakeholders better understand the financial position of enterprises. The study also makes conclusions about the impact of capital structure on the profitability of businesses, helping investors to make smarter and more effective investment decisions. Secondly, the study also provides suggestions and recommendations for businesses in the construction - real estate industry, helping them to improve their profitability through capital structure and financial measures. This can contribute to the development of the industry and the whole economy of the country.
Structure of the study This research consists of five chapters.