Factors Affecting Capital Structure of Listed Construction Companies on Hanoi Stock Exchange

Abstract

The aim of this article is to determine the influence of factors on the capital structure of construction companies listed on the Hanoi Stock Exchange. The data of the article were collected and calculated from the financial statements of 54 construction companies listed on Hanoi Stock Exchange from 2012 to 2019. With the application of E-view software in quantitative analysis to build panel data regression model (panel data), the article has built a regression model to determine the relationship of intrinsic factors affecting the capital structure of construction companies listed on Hanoi Stock Exchange. In the study, dependent variable is capital structure, determined by the debt-toequity ratio. Profitability, coefficient of solvency, size, loan interest rate, structure of tangible assets, and growth are independent variables. The results showed that the two factors of growth and firm size positively affect the capital structure, the profitability factor has the opposite effect on capital structure. Factors of short-term debt solvency, average loan interest rate and tangible asset structure have no correlation with capital structure. The findings of this article are useful for business administrators, helping business managers make the right financial decisions to make capital structure decisions in their own conditions.

Role of Investment Opportunity Set (IOS) in Moderating the Influence of Company Size, Activity, and Profitability on Capital Structure in Multi-Industry Sector Companies for the Period 2015-2019

“…05 No. 01, 2022 statement is supported with research conducted by (Atiqoh & Asyik, 2016) and (Nguyen & Tran, 2020). In addition, the activity has a positive and significant effect on the capital structure, meaning that the higher the company's activity, the more effective the company will be in managing the company's assets to generate sales that are beneficial to the company and investors that the company can improve the company's financial performance.…”

“…The larger the firm size, the more foreign capital the company needs to support its operational activities, and one alternative fulfillment is with foreign capital when the capital itself is insufficient (Andika & Sedana, 2019). Studies supporting this view include (Denziana & Yunggo, 2017), (Alzomaia, 2014), and (Nguyen & Tran, 2020), which state that the bigger the company, the larger the capital structure. According to (Hery, 2015) Based on pecking order theory and previous research, the hypothesis is as follows: H1 and H4 : The firm size of the company is a positive and significant effect on capital structure and investment opportunity set.…”

“…Retained earnings have a significant negative effect on capital structure (Bandyopadhyay & Barua, 2016). Nguyen & Tran (2020) showed that growth factors and the company's size positively affected the capital structure, and profitability factors negatively affected the capital structure. The solvency factors of short-term debt, average loan interest rates, and the structure of tangible assets have nothing to do with capital structure.…”

“…Following the research conducted by (Nguyen & Tran, 2020), the firm size positively affects the capital structure. (Sari & Haryanto, 2013), there is a positive and significant relationship between the firm size and the capital structure.…”

Impacts of Firm Characteristics on Mining Companies Capital Structure

“…It is imperative to keep exploring the different factors influencing the capital structure decision of a firm with new variables and distinct time periods for a unique set of industries or sectors. Among them are researches conducted by Thuraisingam and Kengatharan (2019), Pongsupatt & Pongsupatt (2019), Farrukh and Asad (2017), Czerwonka andJaworski (2017), Hussein et al (2017), Nguyen and Tran (2020), Moradi & Paulet (2018), Burki (2017), Farrukh and Asad (2017), Sanyaolu et al (2018), Jaworski and Czerwonka (2017), Rao et al (2017), andJahfer andMadurasinghe (2019). This research is a replication of the research conducted by Shah and Khan (2017) titled "Factors Determining Capital Structure of Pakistani Non-Financial Firms"…”