The Impact Of Capital Structure On Firm Value A Case Of Stock Market In Vietnam

Abstract

This research examined how capital structure influences firm value within three sectors including Real estate, Insurance and Securities. Utilizing a dataset of 52 businesses in three fields of real estate, insurance and securities listed on Hose spanning from 2014 to 2022, various variables such as firm quality (calculated by the Altman Z score), leverage, size, profitability, tangibility, growth, and liquidity were analyzed to understand their impact on firm value. Additionally,the Dummy variable is used to distinguish how the differences between three industries of real estate, insurance and securities affect enterprise value.Panel data techniques, including fixed effects, and random effects models, were employed for empirical analysis. The outcomes show that Leverage, Size Firm, Liquidity have significant positive influences on firm value. Conversely, Interest Rate has a significant negative impact on firm value. GDP growth, 7 Tangibility, Profitability have positive impact on firm value, do not achieve statistical significance. On the contrary, Firm Growth and Firm Quality display a negative impact without statistical significance. Besides, the results indicate that the real estate industry adversely affects firm value compared to the securities industry. Insurance industry positively affects firm value compared to the securities industry. Notably, the study finds that capital structure, represented by the leverage ratio, positively affects firm value. Therefore, companies should closely monitor their leverage ratios.This research examined how capital structure influences firm value within three sectors including Real estate, Insurance and Securities. Utilizing a dataset of 52 businesses in three fields of real estate, insurance and securities listed on Hose spanning from 2014 to 2022, various variables such as firm quality (calculated by the Altman Z score), leverage, size, profitability, tangibility, growth, and liquidity were analyzed to understand their impact on firm value. Additionally,the Dummy variable is used to distinguish how the differences between three industries of real estate, insurance and securities affect enterprise value.Panel data techniques, including fixed effects, and random effects models, were employed for empirical analysis. The outcomes show that Leverage, Size Firm, Liquidity have significant positive influences on firm value. Conversely, Interest Rate has a significant negative impact on firm value. GDP growth, 7 Tangibility, Profitability have positive impact on firm value, do not achieve statistical significance. On the contrary, Firm Growth and Firm Quality display a negative impact without statistical significance. Besides, the results indicate that the real estate industry adversely affects firm value compared to the securities industry. Insurance industry positively affects firm value compared to the securities industry. Notably, the study finds that capital structure, represented by the leverage ratio, positively affects firm value. Therefore, companies should closely monitor their leverage ratios.