Factors affecting the profitability of listed agricultural companies in the Vietnamese stock market

Thi Phan Thu Nguyen; Thi Quynh Anh Nguyen

doi:10.31893/multiscience.2024125

Keywords:

Abstract

This paper aims to investigate the factors affecting the profitability of agricultural companies in Vietnam. The study is conducted using data from 30 listed agricultural companies on the Vietnamese stock market during 2020-2022. This study uses linear regression models including ordinary least squares (OLS), fixed effect (FE) and random effect (RE) models. In addition, the tests are also conducted to select the appropriate model. In this study, the company's profitability is measured by return on assets (ROA). The results of the study show that economic growth has a positive impact on profitability; leverage, company size and inflation have a negative impact on profitability, while revenue growth rate and current ratio do not affect the profitability of the business.
References
1. Agustin, H., Indrastuti, S., & Tanjung, A. R. (2020). The Examining The Capital Structure Determinants: Empirical Analysis Ofreal Estate And Property Industry In Indonesia. PalArch’s Journal of Archaeology of Egypt/Egyptology, 17(10), 320–327.
2. Ahmad, N., Salman, A., & Shamsi, A. (2015). Impact of financial leverage on firms’ profitability: An investigation from cement sector of Pakistan. Research Journal of Finance and Accounting, 6(7), 2222–1697.
3. Akben-Selcuk, E. (2016). Does firm age affect the firm profitability? Evidence from Turkey. Research Journal of Finance and Accounting, 3, 1–9.
4. Al-Sakran, S. A. (2001). Leverage determinants in the absence of corporate tax system: the case of non-financial publicly traded corporations in Saudi Arabia. Managerial Finance, 27(10/11), 58–86.
5. Alshatti, A. S. (2015). The effect of the liquidity management on profitability in the Jordanian commercial banks. International Journal of Business and Management, 10(1), 62–71.
6. Asmirantho, E. (2014). Effect of financial fundamental factors and macroeconomics to stock return with implications on corporate value (Tobin’s Q) real estate and property go public in Indonesia. Journal Business & Management, 1(1), 1235–1240.
7. Azhar, K. A., & Ahmed, N. (2019). Relationship between firm size and profitability: investigation from textile sector of Pakistan. International Journal of Information, Business and Management, 11(2), 62–73.
8. Bauer, P., & Others. (2004). Determinants of capital structure: empirical evidence from the Czech Republic. Czech Journal of Economics and Finance (Finance a Uver), 54(1–2), 2–21.
9. Binh, T., Huong, V., & Loan, N. (2020). Zombie Companies: Experimental Research from Real Estate Listed Sectors. Revista Argentina de Clínica Psicológica, 29(5), 1360–1369.
10. Bolek, M., & Wili’nski, W. (2012). The influence of liquidity on profitability of polish construction sector companies. E-Finanse: Financial Internet Quarterly, 8(1), 38–52.
11. Bradley, M., Jarrell, G. A., & Kim, E. H. (1984). On the existence of an optimal capital structure: Theory and evidence. The Journal of Finance, 39(3), 857–878.
12. Burja, C. (2011). FACTORS INFLUENCING THE COMPANIES’PROFITABILITY. Annales Universitatis Apulensis: Series Oeconomica, 13(2), 215.
13. Cassar, G., & Holmes, S. (2003). Capital structure and financing of SMEs: Australian evidence. Accounting & Finance, 43(2), 123–147.
14. Dang, H. N., Vu, V. T. T., Ngo, X. T., & Hoang, H. T. V. (2019). Study the impact of growth, firm size, capital structure, and profitability on enterprise value: Evidence of enterprises in Vietnam. Journal of Corporate Accounting & Finance, 30(1), 144–160.
15. Dang, H. T., Phan, D. T., Nguyen, H. T., & Hoang, L. H. T. (2020). Factors affecting financial risk: evidence from listed enterprises in Vietnam. The Journal of Asian Finance, Economics and Business, 7(9), 11–18.
16. Diaz, J. F. T., & Hindro, M. C. T. (2017). Factors affecting the profitability of Indonesian real estate publiclylisted companies. Asian Journal of Finance and Accounting, 9(1), 396–428.
17. Doan, T. (2020). Profitability of real estate firms: Evidence using GMM estimation. Management Science Letters, 10(2), 327–332.
18. Fama, E. F., & French, K. R. (2004). The capital asset pricing model: Theory and evidence. Journal of Economic Perspectives, 18(3), 25–46.
19. Ferri, M. G., & Jones, W. H. (1979). Determinants of financial structure: A new methodological approach. The Journal of Finance, 34(3), 631–644.
20. Jordan, J., Lowe, J., & Taylor, P. (1998). Strategy and financial policy in UK small firms. Journal of Business Finance & Accounting, 25(1–2), 1–27.
21. Kester, W. C. (1986). Capital and ownership structure: A comparison of United States and Japanese manufacturing corporations. Financial Management, 5–16.
22. Laichena, K. E., & Obwogi, T. N. (2015). Effects of macroeconomic variables on stock returns in the East African community stock exchange market. International Journal of Education and Research, 3(10), 305–320.
23. Mishra, C. S., & Mcconaughy, D. L. (1999). Founding Family Control and Capital Structure: The Risk of Loss of Control and the Aversion to Debt. Entrepreneurship Theory and Practice, 23(4), 53–64. doi:10.1177/104225879902300404
24. Myers, S. C. (1977). Determinants of corporate borrowing. Journal of Financial Economics, 5(2), 147–175.
25. Odusanya, I. A., Yinusa, O. G., & Ilo, B. M. (2018). Determinants of firm profitability in Nigeria: Evidence from dynamic panel models. SPOUDAI-Journal of Economics and Business, 68(1), 43–58.
26. Paulo Esperança, J., Matias Gama, A. P., & Azzim Gulamhussen, M. (2003). Corporate debt policy of small firms: an empirical (re) examination. Journal of Small Business and Enterprise Development, 10(1), 62–80.
27. Petersen, M. A., & Rajan, R. G. (1994). The Benefits of Lending Relationships: Evidence from Small Business Data. The Journal of Finance, 49(1), 3–37. Retrieved from http://www.jstor.org/stable/2329133
28. Pham, K. X., Nguyen, Q. N., & Van Nguyen, C. (2020). Effect of working capital management on the profitability of steel companies on Vietnam stock exchanges. The Journal of Asian Finance, Economics and Business, 7(10), 741–750.
29. Rajan, R. G., & Zingales, L. (2000). THE GREAT REVERSALS: THE POLITICS OF FINANCIAL DEVELOPMENT IN THE 20th CENTURY ECONOMICS DEPARTMENT WORKING PAPERS NO. 265. WORKING PAPERS-ORGANISATION FOR ECONOMIC COOPERATION AND DEVELOPMENT ECONOMICS DEPARTMENT.
30. Renaldi, J. Y., Pinem, D. B., & Permadhy, Y. T. (2020). Analysis of factors affecting the value of manufacturing industry companies in the Indonesian Stock Exchange (IDX). European Journal of Business and Management Research, 5(1).
31. Seissian, L. A., Gharios, R. T., & Awad, A. B. (2018). Structural and market-related factors impacting profitability: A cross sectional study of listed companies. Arab Economic and Business Journal, 13(2), 125–133.
32. Setyowati, R., Masitoh, E., & Siddi, P. (2020). Factors Affecting The Value Of Companies In The Food And Beverage Companies Listed On BEI. Journal of Business, Management, & Accounting, 2(1).
33. Sharif, T., Purohit, H., & Pillai, R. (2015). Analysis of factors affecting share prices: The case of Bahrain stock exchange. International Journal of Economics and Finance, 7(3), 207–216.
34. Simiyu, L. A., & Huo, X. (2013). Factors affecting leveraging for quoted real estate development companies in China. International Journal of Economics and Finance, 5(7), 85.
35. Śpiewak, T. (2008). Zarządzanie środkami pieniężnymi w przedsiębiorstwie: teoria i praktyka. Prace Naukowe Wydziału Ekonomii Uniwersytetu Rzeszowskiego. Monografie i Opracowania, (4).
36. Stulz, R. (1990). Managerial discretion and optimal financing policies. Journal of Financial Economics, 26(1), 3–27.
37. Susanti, N., Restiana, N. G., & Others. (2018). What’s the best factor to determining firm value. Jurnal Keuangan Dan Perbankan, 22(2), 301–309.
38. Vina, V., Kosasih, J., Susanto, K., & Astuty, F. (2021). The Influence of Cash Position, Debt to Asset Ratio and Firm Size on Dividend Payout Ratio in Property and Real Estate Companies Listed on The Indonesia Stock Exchange for the 2014-2018 Period. Jurnal Akuntansi, Manajemen Dan Ekonomi, 22(3), 30–36. doi:10.32424/1.jame.2020.22.3.3116
39. Waluyo, W. (2017). Firm size, firm age, and firm growth on corporate social responsibility in Indonesia: The case of real estate companies.
40. Yana, S. (2010). Factors that determine firm performance of New Zealand listed companies. Master of Business, Auckland University of Technology.

This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

How to cite

Nguyen, T. P. T., & Nguyen, T. Q. A. (2024). Factors affecting the profitability of listed agricultural companies in the Vietnamese stock market. Multidisciplinary Science Journal, 6(7), 2024125. https://doi.org/10.31893/multiscience.2024125

[1] Agustin, H., Indrastuti, S., & Tanjung, A. R. (2020). The Examining The Capital Structure Determinants: Empirical Analysis Ofreal Estate And Property Industry In Indonesia. PalArch’s Journal of Archaeology of Egypt/Egyptology, 17(10), 320–327.

[2] Ahmad, N., Salman, A., & Shamsi, A. (2015). Impact of financial leverage on firms’ profitability: An investigation from cement sector of Pakistan. Research Journal of Finance and Accounting, 6(7), 2222–1697.

[3] Akben-Selcuk, E. (2016). Does firm age affect the firm profitability? Evidence from Turkey. Research Journal of Finance and Accounting, 3, 1–9.

[4] Al-Sakran, S. A. (2001). Leverage determinants in the absence of corporate tax system: the case of non-financial publicly traded corporations in Saudi Arabia. Managerial Finance, 27(10/11), 58–86.

[5] Alshatti, A. S. (2015). The effect of the liquidity management on profitability in the Jordanian commercial banks. International Journal of Business and Management, 10(1), 62–71.

[6] Asmirantho, E. (2014). Effect of financial fundamental factors and macroeconomics to stock return with implications on corporate value (Tobin’s Q) real estate and property go public in Indonesia. Journal Business & Management, 1(1), 1235–1240.

[7] Azhar, K. A., & Ahmed, N. (2019). Relationship between firm size and profitability: investigation from textile sector of Pakistan. International Journal of Information, Business and Management, 11(2), 62–73.

[8] Bauer, P., & Others. (2004). Determinants of capital structure: empirical evidence from the Czech Republic. Czech Journal of Economics and Finance (Finance a Uver), 54(1–2), 2–21.

[9] Binh, T., Huong, V., & Loan, N. (2020). Zombie Companies: Experimental Research from Real Estate Listed Sectors. Revista Argentina de Clínica Psicológica, 29(5), 1360–1369.

[10] Bolek, M., & Wili’nski, W. (2012). The influence of liquidity on profitability of polish construction sector companies. E-Finanse: Financial Internet Quarterly, 8(1), 38–52.

[11] Bradley, M., Jarrell, G. A., & Kim, E. H. (1984). On the existence of an optimal capital structure: Theory and evidence. The Journal of Finance, 39(3), 857–878.

[12] Burja, C. (2011). FACTORS INFLUENCING THE COMPANIES’PROFITABILITY. Annales Universitatis Apulensis: Series Oeconomica, 13(2), 215.

[13] Cassar, G., & Holmes, S. (2003). Capital structure and financing of SMEs: Australian evidence. Accounting & Finance, 43(2), 123–147.

[14] Dang, H. N., Vu, V. T. T., Ngo, X. T., & Hoang, H. T. V. (2019). Study the impact of growth, firm size, capital structure, and profitability on enterprise value: Evidence of enterprises in Vietnam. Journal of Corporate Accounting & Finance, 30(1), 144–160.

[15] Dang, H. T., Phan, D. T., Nguyen, H. T., & Hoang, L. H. T. (2020). Factors affecting financial risk: evidence from listed enterprises in Vietnam. The Journal of Asian Finance, Economics and Business, 7(9), 11–18.

[16] Diaz, J. F. T., & Hindro, M. C. T. (2017). Factors affecting the profitability of Indonesian real estate publiclylisted companies. Asian Journal of Finance and Accounting, 9(1), 396–428.

[17] Doan, T. (2020). Profitability of real estate firms: Evidence using GMM estimation. Management Science Letters, 10(2), 327–332.

[18] Fama, E. F., & French, K. R. (2004). The capital asset pricing model: Theory and evidence. Journal of Economic Perspectives, 18(3), 25–46.

[19] Ferri, M. G., & Jones, W. H. (1979). Determinants of financial structure: A new methodological approach. The Journal of Finance, 34(3), 631–644.

[20] Jordan, J., Lowe, J., & Taylor, P. (1998). Strategy and financial policy in UK small firms. Journal of Business Finance & Accounting, 25(1–2), 1–27.

[21] Kester, W. C. (1986). Capital and ownership structure: A comparison of United States and Japanese manufacturing corporations. Financial Management, 5–16.

[22] Laichena, K. E., & Obwogi, T. N. (2015). Effects of macroeconomic variables on stock returns in the East African community stock exchange market. International Journal of Education and Research, 3(10), 305–320.

[23] Mishra, C. S., & Mcconaughy, D. L. (1999). Founding Family Control and Capital Structure: The Risk of Loss of Control and the Aversion to Debt. Entrepreneurship Theory and Practice, 23(4), 53–64. doi:10.1177/104225879902300404

[24] Myers, S. C. (1977). Determinants of corporate borrowing. Journal of Financial Economics, 5(2), 147–175.

[25] Odusanya, I. A., Yinusa, O. G., & Ilo, B. M. (2018). Determinants of firm profitability in Nigeria: Evidence from dynamic panel models. SPOUDAI-Journal of Economics and Business, 68(1), 43–58.

[26] Paulo Esperança, J., Matias Gama, A. P., & Azzim Gulamhussen, M. (2003). Corporate debt policy of small firms: an empirical (re) examination. Journal of Small Business and Enterprise Development, 10(1), 62–80.

[27] Petersen, M. A., & Rajan, R. G. (1994). The Benefits of Lending Relationships: Evidence from Small Business Data. The Journal of Finance, 49(1), 3–37. Retrieved from http://www.jstor.org/stable/2329133

[28] Pham, K. X., Nguyen, Q. N., & Van Nguyen, C. (2020). Effect of working capital management on the profitability of steel companies on Vietnam stock exchanges. The Journal of Asian Finance, Economics and Business, 7(10), 741–750.

[29] Rajan, R. G., & Zingales, L. (2000). THE GREAT REVERSALS: THE POLITICS OF FINANCIAL DEVELOPMENT IN THE 20th CENTURY ECONOMICS DEPARTMENT WORKING PAPERS NO. 265. WORKING PAPERS-ORGANISATION FOR ECONOMIC COOPERATION AND DEVELOPMENT ECONOMICS DEPARTMENT.

[30] Renaldi, J. Y., Pinem, D. B., & Permadhy, Y. T. (2020). Analysis of factors affecting the value of manufacturing industry companies in the Indonesian Stock Exchange (IDX). European Journal of Business and Management Research, 5(1).

[31] Seissian, L. A., Gharios, R. T., & Awad, A. B. (2018). Structural and market-related factors impacting profitability: A cross sectional study of listed companies. Arab Economic and Business Journal, 13(2), 125–133.

[32] Setyowati, R., Masitoh, E., & Siddi, P. (2020). Factors Affecting The Value Of Companies In The Food And Beverage Companies Listed On BEI. Journal of Business, Management, & Accounting, 2(1).

[33] Sharif, T., Purohit, H., & Pillai, R. (2015). Analysis of factors affecting share prices: The case of Bahrain stock exchange. International Journal of Economics and Finance, 7(3), 207–216.

[34] Simiyu, L. A., & Huo, X. (2013). Factors affecting leveraging for quoted real estate development companies in China. International Journal of Economics and Finance, 5(7), 85.

[35] Śpiewak, T. (2008). Zarządzanie środkami pieniężnymi w przedsiębiorstwie: teoria i praktyka. Prace Naukowe Wydziału Ekonomii Uniwersytetu Rzeszowskiego. Monografie i Opracowania, (4).

[36] Stulz, R. (1990). Managerial discretion and optimal financing policies. Journal of Financial Economics, 26(1), 3–27.

[37] Susanti, N., Restiana, N. G., & Others. (2018). What’s the best factor to determining firm value. Jurnal Keuangan Dan Perbankan, 22(2), 301–309.

[38] Vina, V., Kosasih, J., Susanto, K., & Astuty, F. (2021). The Influence of Cash Position, Debt to Asset Ratio and Firm Size on Dividend Payout Ratio in Property and Real Estate Companies Listed on The Indonesia Stock Exchange for the 2014-2018 Period. Jurnal Akuntansi, Manajemen Dan Ekonomi, 22(3), 30–36. doi:10.32424/1.jame.2020.22.3.3116

[39] Waluyo, W. (2017). Firm size, firm age, and firm growth on corporate social responsibility in Indonesia: The case of real estate companies.

[40] Yana, S. (2010). Factors that determine firm performance of New Zealand listed companies. Master of Business, Auckland University of Technology.

Abstract

References

How to cite