Factors affecting the capital structure of listed cement enterprises in Vietnam

Abstract

The purpose of this research is to find out the factors affecting the capital structure of listed cement enterprises in Vietnam. The investigation was conducted on a sample of 77 observations with data collected from the financial statements of cement production enterprises in Vietnam with stocks listed on the Stock Exchanges in Ho Chi Minh city and Hanoi in the period from 2010 to 2019. Through the appli­cation of datasheet estimation methods, combined with the development, selection and testing of models, the study has selected affixed effects model to assess the direction and level of the impact of factors on the debt ratio of enterprises in the sample. Factors identified to affect the capital structure of listed cement compa­ nies include: Firm size, asset structure, growth potential, liquidity, and profitability. In particular, the factor of firm size affects in the same direction and has the greatest impact on the capita! structure. The results are in line with the relevant empirical studies, with the operational characteristic of Vietnam’s cement enterpris­es as well as consistent with the Pecking order theory and the Trade-off theory of capital structure. The study can be useful to financial advisors, investors and corporate financial administrators.