Effects Of Inventory Management On Firm Performance: Empirical Research On Vietnam Manufacturing Firms

Abstract

The primary aim of this research is to investigate the effect of management of inventory on performance of manufacturing companies in Vietnam. A quantitative approach and descriptive research design were used to explore the study issues. A panel secondary data over a six-year period beginning from 2017 to 2022 was collected for the analysis from the audited financial statements and annual reports of 73 manufacturing firms in 2 industrial sectors: Food and beverage production, Construction materials listed on HOSE and HNX. Return on assets and return on equity were inspected as a proxy for firm performance. The firm size, firm age and financial leverage are the control variables. The outcome of the research established inventory turnover as a measure of inventory management does not significantly affect return on assets as well as return on equity. This study also showed limitations in some points and found ways to increase firm performance for those manufacturing companies through inventory management.