Factors affecting the financial efficiency of listed companies in Vietnam
Main Article Content
Abstract
The article identifies factors affecting financial performance at Vietnamese listed companies, and from there, the study proposes some policy implications to improve the financial performance of these firms. Using a quantitative research method (feasible generalized least squares method-FGLS), the article has identified six factors affecting the financial performance of 80 listed firms on Ho Chi Minh City Stock Exchange from 2009 to 2019 (with 880 observations). These factors are statistically significant at the 5% level, including firm size, age, leverage ratio, revenue growth, gross domestic product, and inflation rate. At the same time, the level of impact of factors affecting the financial performance of enterprises is estimated to be different. On that basis, the study has proposed some policy implications to improve financial efficiency in listed companies in Vietnam
Article Details
Keywords
Listed companies, Financial performance, ; Feasible general least squares method, Stock Exchange City Securities Ho Chi Minh City, Vietnam
References
Agarwal, R., & Gort, M. (2002). Firm and product life cycles and firm survival. American Economic Review, 92(2), 184-190. doi:10.1257/000282802320189221
Anbar, A., & Alper, D. (2011). Bank specific and macroeconomic determinants of commercial bank profitability: Empirical evidence from Turkey. Business and economics research journal, 2(2), 139-152.
Beneish, M. D. (2001). Earnings management: A perspective. Managerial Finance, 27(12), 3-17. doi:10.1108/03074350110767411
Beneish, M., Lee, C. & Tarpley, R. (2001). Contextual fundamental analysis in the prediction of extreme returns. Review of Accounting Studies, 2(3), 165-191.
Chu Thị Thu Thủy, Nguyễn Thanh Huyền & Ngô Thị Quyên (2015). Phân tích các nhân tố ảnh hưởng đến hiệu quả tài chính: Nghiên cứu điển hình tại các công ty cổ phần phi tài chính niêm yết trên sở giao dịch chứng khoán TP Hồ Chí Minh. Tạp chí Kinh tế và Phát triển, 215(tháng 5/2015), 1-8.
Đỗ Dương Thanh Ngọc (2011). Các yếu tố tài chính tác động đến hiệu quả hoạt động kinh doanh của các doanh nghiệp Ngành Xây dựng niêm yếu trên thị trường chứng khoán Việt Nam. Trường Đại học Kinh tế TP. Hồ Chí Minh.
Durrah, O., Rahman, A. A. A., Jamil, S. A., & Ghafeer, N. A. (2016). Exploring the relationship between liquidity ratios and indicators of financial performance: An analytical study on food industrial companies listed in Amman Bursa. International Journal of Economics and Financial Issues, 6(2), 435-441.
Elangkumaran, P., & Karthika, T. (2013). An analysis of liquidity, profitability and risk: A study of selected listed food, beverage and tobacco companies in Sri Lanka. 3rd International Conference (pp. 1-7). South Eastern: South Eastern University of Sri Lanka.
Gatsi, J. G., Gadzo, S. G., & Kportorgbi, H. K. (2013). The effect of corporate income tax on financial performance of listed manufacturing firms in Ghana. Research Journal of Finance and Accounting, 4(15), 118-124.
Gautam, K. (2008). Important tips for stock market investors’ outlook money. Rediff Indian.
Guru, B. K., Staunton, J., & Balashanmugam, B. (2002). Determinants of commercial bank profitability in Malaysia. Journal of Money, Credit, and Banking, 17(1), 69-82.
Harrison, F. (1974). The management of scientists: Determinants of perceived role performance. Academy of Management Journal, 17(2), 234-241.
Hu, Y., & Izumida, S. (2008). Ownership concentration and corporate performance: A causal analysis with Japanese panel data. Corporate Governance: An International Review, 16(4), 342-358. doi:10.1111/j.1467-8683.2008.00690.x
Jiang, B.B., Laurenceson, J., & Tang, K.K. (2008). Share reform and the performance of China’s listed companies. China Economic Review, 19(3), 489–501.
Khatab, H., Masood, M., Zaman, K., Saleem, S., & Saeed, B. (2011). Corporate governance and firm performance: A case study of Karachi stock market. International Journal of Trade, Economics and Finance, 2(1), 39-43.
Khidmat, W. Bin, & Rehman, M. U. (2014). Impact of liquidity & solvency on profitability chemical sector of Pakistan. Economics Management Innovation, 6(3), 3–13.
Le, T. V., & Buck, T. (2011). State ownership and listed firm performance: a universally negative governance relationship?. Journal of Management and Governance, 15(2), 227-248.
Lechner, C., Soppe, B., & Dowling, M. (2016). Vertical coopetition and the sales growth of young and small firms. Journal of Small Business Management, 54(1), 67-84.
Liargovas, P. G., & Skandalis, K. S. (2010). Factors affecting firms’ performance: The case of Greece. Global Business and Management Research: An International Journal, 2(2), 184-197.
Loderer, C. F., Neusser, K., & Waelchli, U. (2011). Firm age and survival. SSRN Electronic Journal, 2-51. doi:10.2139/ssrn.1430408
Matar, A., Al-Rdaydeh, M., Al-Shannag, F., & Odeh, M. (2018). Factors affecting the corporate performance: Panel data analysis for listed firms in Jordan. Academy of Accounting and Financial Studies Journal, 22(6), 1-10.
Malik, H. (2011). Determinants of Insurance Companies Profitability: An Analysis of Insurance Sector of Pakistan. Academic Research International, 1(3), 1-5.
Margaritis, D., & Psillaki, M. (2010). Capital structure, equity ownership and firm performance. Journal of banking & finance, 34(3), 621-632. doi: 10.1016/j.jbankfin.2009.08.023
Ming, T. C., & Gee, C. S. (2008). The influence of ownership structure on corporate performance of Malaysian Public Listed Companies. ASEAN Economic Bulletin, 25(2), 195-208.
Modigliani, F., & Miller, M. H. (1958). The cost of capital, corporation finance and the theory of investment. The American economic review, 48(3), 261-297.
Mushtaq, H., Chishti, A. F., Kanwal, S., & Saeed, S. (2015). Trade off between liquidity and profitability. International Journal of Scientific Research and Management, 3(5), 2823–2842. doi:https://doi.org/2823-2842
Ngô Thị Hằng, Nguyễn Thị Thuỳ Linh (2020). Các nhân tố ảnh hưởng tới khả năng sinh lời của doanh nghiệp bất động sản Việt Nam: Ứng dụng mô hình tác động ngẫu nhiên và tác động cố định. Tạp chí Khoa học & Đào tạo Ngân hàng, 223, 13-25.
Nguyễn Lê Thanh Tuyền (2013). Nghiên Cứu các nhân tố ảnh hưởng đến hiệu quả hoạt động kinh doanh của các công ty ngành sản xuất chế biến thực phẩm niêm yết trên thị trường chứng khoán Việt Nam. Trường Đại Học Đà Nẵng.
Olatunji, Toyin E. & Adegbite, Tajudeen A. (2014). Investment in fixed assets and firm profitability: Empirical evidence from the Nigerian banking sector. Asian Journal of Social Sciences and Management Studies, 1(3), 78-82.
Onaolapo, A. A., & Kajola, S. O. (2010). Capital structure and firm performance: evidence from Nigeria. European Journal of Economics, Finance and Administrative Sciences, 25(1), 70-82.
Ongore, V. O. (2011). The relationship between ownership structure and firm performance: An empirical analysis of listed companies in Kenya. African Journal of Business Management, 5(6), 2120-2128.
Owolabi, S. A., Obiakor, R. T., & Okwu, A. T. (2011). Investigating liquidity profitabulity relationship in business organizations: a studi of selected quoted companies in Nigeria. British Journal of Economics, Finance and Management Sciences, 1(2), 11-29.
Pouraghajan, A., Malekian, E., Emamgholipour, M., Lotfollahpour, V., & Bagheri, M. M. (2012). The relationship between capital structure and firm performance evaluation measures: Evidence from the Tehran stock exchange. International Journal of Business and Commerce, 1(9), 166-181.
Price, J. L. (1968). Organizational effectiveness: An inventory of propositions (Vol. 10). Homewood, Ill: RD Irwin.
Shah, A. Z. S., Butt, A. S., & Saeed, M. M. (2011). Ownership structure and performance of firms: Empirical evidence from an emerging market. African Journal of Business Management, 5(2), 515-523.
Simerly, R. L. & Li, M. (2000). Environmental dynamism, capital structure and performance: A theoretical integration and an empirical test. Strategic Management Journal, 21(1), 31-49.
Thủy, H. X., Hiếu, Đ. L. M., Danh, D. K., Đạt, P. P. T., Ngọc, N. H., & Ngọc, P. N. (2020). The factors affect financial performance of companies listed on Hanoi stock exchange. Science & Technology Development Journal-Economics-Law and Management, 4(3), 948-962.
Tian, L., & Estrin, S. (2008). Retained state shareholding in Chinese PLCs: does government ownership always reduce corporate value?. Journal of Comparative Economics, 36(1), 74-89. doi:10.1016/j.jce.2007.10.003
Tomola, M. O. (2013). Determinants of banks’ profitability an a developing economy: evidence from nigeria. Organizations and Markets in Emerging Economies, 4(2), 97-111.
Võ Thị Tuyết Hằng (2015). Nghiên cứu các nhân tố ảnh hưởng đến hiệu quả kinh doanh của các doanh nghiệp ngành xây dựng niêm yết trên sàn chứng khoán Việt Nam. Trường Đại Học Đà Nẵng.
Wang, Y. J. (2002). Liquidity management, operating performance, and corporate value: evidence from Japan and Taiwan. Journal of Multinational Financial Management, 12(12), 159–169.
Williams, S. M., & Firer, S. (2003). Intellectual capital and traditional measures of corporate performance. Journal of Intellectual Capital, 4(3), 348-60.
Yamane, T. (1967). Statistics, An Introductory Analysis (2 ed.). New York: Harper and Row.
Yameen, M., Farhan, N. H., & Tabash, M. I. (2019). The impact of liquidity on firms’ performance: Empirical investigation from Indian pharmaceutical companies. Academic Journal of Interdisciplinary Studies, 8(3), 212-212. doi:10.36941/ajis-2019-0019
Yuchtman, E., & Seashore, S. E. (1967). A system resource approach to organizational effectiveness. American sociological review, 32(6), 891-903. doi:10.2307/2092843
Anbar, A., & Alper, D. (2011). Bank specific and macroeconomic determinants of commercial bank profitability: Empirical evidence from Turkey. Business and economics research journal, 2(2), 139-152.
Beneish, M. D. (2001). Earnings management: A perspective. Managerial Finance, 27(12), 3-17. doi:10.1108/03074350110767411
Beneish, M., Lee, C. & Tarpley, R. (2001). Contextual fundamental analysis in the prediction of extreme returns. Review of Accounting Studies, 2(3), 165-191.
Chu Thị Thu Thủy, Nguyễn Thanh Huyền & Ngô Thị Quyên (2015). Phân tích các nhân tố ảnh hưởng đến hiệu quả tài chính: Nghiên cứu điển hình tại các công ty cổ phần phi tài chính niêm yết trên sở giao dịch chứng khoán TP Hồ Chí Minh. Tạp chí Kinh tế và Phát triển, 215(tháng 5/2015), 1-8.
Đỗ Dương Thanh Ngọc (2011). Các yếu tố tài chính tác động đến hiệu quả hoạt động kinh doanh của các doanh nghiệp Ngành Xây dựng niêm yếu trên thị trường chứng khoán Việt Nam. Trường Đại học Kinh tế TP. Hồ Chí Minh.
Durrah, O., Rahman, A. A. A., Jamil, S. A., & Ghafeer, N. A. (2016). Exploring the relationship between liquidity ratios and indicators of financial performance: An analytical study on food industrial companies listed in Amman Bursa. International Journal of Economics and Financial Issues, 6(2), 435-441.
Elangkumaran, P., & Karthika, T. (2013). An analysis of liquidity, profitability and risk: A study of selected listed food, beverage and tobacco companies in Sri Lanka. 3rd International Conference (pp. 1-7). South Eastern: South Eastern University of Sri Lanka.
Gatsi, J. G., Gadzo, S. G., & Kportorgbi, H. K. (2013). The effect of corporate income tax on financial performance of listed manufacturing firms in Ghana. Research Journal of Finance and Accounting, 4(15), 118-124.
Gautam, K. (2008). Important tips for stock market investors’ outlook money. Rediff Indian.
Guru, B. K., Staunton, J., & Balashanmugam, B. (2002). Determinants of commercial bank profitability in Malaysia. Journal of Money, Credit, and Banking, 17(1), 69-82.
Harrison, F. (1974). The management of scientists: Determinants of perceived role performance. Academy of Management Journal, 17(2), 234-241.
Hu, Y., & Izumida, S. (2008). Ownership concentration and corporate performance: A causal analysis with Japanese panel data. Corporate Governance: An International Review, 16(4), 342-358. doi:10.1111/j.1467-8683.2008.00690.x
Jiang, B.B., Laurenceson, J., & Tang, K.K. (2008). Share reform and the performance of China’s listed companies. China Economic Review, 19(3), 489–501.
Khatab, H., Masood, M., Zaman, K., Saleem, S., & Saeed, B. (2011). Corporate governance and firm performance: A case study of Karachi stock market. International Journal of Trade, Economics and Finance, 2(1), 39-43.
Khidmat, W. Bin, & Rehman, M. U. (2014). Impact of liquidity & solvency on profitability chemical sector of Pakistan. Economics Management Innovation, 6(3), 3–13.
Le, T. V., & Buck, T. (2011). State ownership and listed firm performance: a universally negative governance relationship?. Journal of Management and Governance, 15(2), 227-248.
Lechner, C., Soppe, B., & Dowling, M. (2016). Vertical coopetition and the sales growth of young and small firms. Journal of Small Business Management, 54(1), 67-84.
Liargovas, P. G., & Skandalis, K. S. (2010). Factors affecting firms’ performance: The case of Greece. Global Business and Management Research: An International Journal, 2(2), 184-197.
Loderer, C. F., Neusser, K., & Waelchli, U. (2011). Firm age and survival. SSRN Electronic Journal, 2-51. doi:10.2139/ssrn.1430408
Matar, A., Al-Rdaydeh, M., Al-Shannag, F., & Odeh, M. (2018). Factors affecting the corporate performance: Panel data analysis for listed firms in Jordan. Academy of Accounting and Financial Studies Journal, 22(6), 1-10.
Malik, H. (2011). Determinants of Insurance Companies Profitability: An Analysis of Insurance Sector of Pakistan. Academic Research International, 1(3), 1-5.
Margaritis, D., & Psillaki, M. (2010). Capital structure, equity ownership and firm performance. Journal of banking & finance, 34(3), 621-632. doi: 10.1016/j.jbankfin.2009.08.023
Ming, T. C., & Gee, C. S. (2008). The influence of ownership structure on corporate performance of Malaysian Public Listed Companies. ASEAN Economic Bulletin, 25(2), 195-208.
Modigliani, F., & Miller, M. H. (1958). The cost of capital, corporation finance and the theory of investment. The American economic review, 48(3), 261-297.
Mushtaq, H., Chishti, A. F., Kanwal, S., & Saeed, S. (2015). Trade off between liquidity and profitability. International Journal of Scientific Research and Management, 3(5), 2823–2842. doi:https://doi.org/2823-2842
Ngô Thị Hằng, Nguyễn Thị Thuỳ Linh (2020). Các nhân tố ảnh hưởng tới khả năng sinh lời của doanh nghiệp bất động sản Việt Nam: Ứng dụng mô hình tác động ngẫu nhiên và tác động cố định. Tạp chí Khoa học & Đào tạo Ngân hàng, 223, 13-25.
Nguyễn Lê Thanh Tuyền (2013). Nghiên Cứu các nhân tố ảnh hưởng đến hiệu quả hoạt động kinh doanh của các công ty ngành sản xuất chế biến thực phẩm niêm yết trên thị trường chứng khoán Việt Nam. Trường Đại Học Đà Nẵng.
Olatunji, Toyin E. & Adegbite, Tajudeen A. (2014). Investment in fixed assets and firm profitability: Empirical evidence from the Nigerian banking sector. Asian Journal of Social Sciences and Management Studies, 1(3), 78-82.
Onaolapo, A. A., & Kajola, S. O. (2010). Capital structure and firm performance: evidence from Nigeria. European Journal of Economics, Finance and Administrative Sciences, 25(1), 70-82.
Ongore, V. O. (2011). The relationship between ownership structure and firm performance: An empirical analysis of listed companies in Kenya. African Journal of Business Management, 5(6), 2120-2128.
Owolabi, S. A., Obiakor, R. T., & Okwu, A. T. (2011). Investigating liquidity profitabulity relationship in business organizations: a studi of selected quoted companies in Nigeria. British Journal of Economics, Finance and Management Sciences, 1(2), 11-29.
Pouraghajan, A., Malekian, E., Emamgholipour, M., Lotfollahpour, V., & Bagheri, M. M. (2012). The relationship between capital structure and firm performance evaluation measures: Evidence from the Tehran stock exchange. International Journal of Business and Commerce, 1(9), 166-181.
Price, J. L. (1968). Organizational effectiveness: An inventory of propositions (Vol. 10). Homewood, Ill: RD Irwin.
Shah, A. Z. S., Butt, A. S., & Saeed, M. M. (2011). Ownership structure and performance of firms: Empirical evidence from an emerging market. African Journal of Business Management, 5(2), 515-523.
Simerly, R. L. & Li, M. (2000). Environmental dynamism, capital structure and performance: A theoretical integration and an empirical test. Strategic Management Journal, 21(1), 31-49.
Thủy, H. X., Hiếu, Đ. L. M., Danh, D. K., Đạt, P. P. T., Ngọc, N. H., & Ngọc, P. N. (2020). The factors affect financial performance of companies listed on Hanoi stock exchange. Science & Technology Development Journal-Economics-Law and Management, 4(3), 948-962.
Tian, L., & Estrin, S. (2008). Retained state shareholding in Chinese PLCs: does government ownership always reduce corporate value?. Journal of Comparative Economics, 36(1), 74-89. doi:10.1016/j.jce.2007.10.003
Tomola, M. O. (2013). Determinants of banks’ profitability an a developing economy: evidence from nigeria. Organizations and Markets in Emerging Economies, 4(2), 97-111.
Võ Thị Tuyết Hằng (2015). Nghiên cứu các nhân tố ảnh hưởng đến hiệu quả kinh doanh của các doanh nghiệp ngành xây dựng niêm yết trên sàn chứng khoán Việt Nam. Trường Đại Học Đà Nẵng.
Wang, Y. J. (2002). Liquidity management, operating performance, and corporate value: evidence from Japan and Taiwan. Journal of Multinational Financial Management, 12(12), 159–169.
Williams, S. M., & Firer, S. (2003). Intellectual capital and traditional measures of corporate performance. Journal of Intellectual Capital, 4(3), 348-60.
Yamane, T. (1967). Statistics, An Introductory Analysis (2 ed.). New York: Harper and Row.
Yameen, M., Farhan, N. H., & Tabash, M. I. (2019). The impact of liquidity on firms’ performance: Empirical investigation from Indian pharmaceutical companies. Academic Journal of Interdisciplinary Studies, 8(3), 212-212. doi:10.36941/ajis-2019-0019
Yuchtman, E., & Seashore, S. E. (1967). A system resource approach to organizational effectiveness. American sociological review, 32(6), 891-903. doi:10.2307/2092843
Most read articles by the same author(s)
- Ngo Nhat Phuong Diem, Thai Tran Van Hanh, Truong Thao Nghi, Do Thi Thuy Nga, The effect of the power of the chief executive officer on earnings management in listed companies in Vietnam , Journal of Finance and Marketing: No. 67 (2022)
- Vo Thi Thu Ha, Nguyen Thi Kieu Oanh, Tran Hong Van, Võ Thị Trúc Đào, Chu Thị Thương, Lê Văn Tuấn, The relationship between financial management and the operational efficiency of smalland medium-sized enterprises in Ho Chi Minh City , Journal of Finance and Marketing: Vol. 13, issue 5
- Chu Thi Thuong, Nguyen Thi Minh Hang, Phan Thi Huyen, Le Van Tuan, Phan Thi Bich Ngoc, The relationship between computerized accounting systems and the job performance of accountants at small and medium enterprises in Ho Chi Minh City , Journal of Finance and Marketing: No. 70 (2022)