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Author: Nguyen Hoang Mai Chi
Nguyen Hoang Mai Chi
Thesis Title: Capital structure, firm performance, and life cycle: Empirical analysis of firms listed in Vietnam
Capital structure, firm performance, and life cycle: Empirical analysis of firms listed in Vietnam
Advisor: 謝劍平
Joseph C.P. Shieh
Committee: 陳俊男
Chun-Nan Chen
張光第
Guang-di Chang
Degree: 碩士
Master
Department: 管理學院 - 財務金融研究所
Graduate Institute of Finance
Thesis Publication Year: 2023
Graduation Academic Year: 111
Language: 英文
Pages: 47
Keywords (in Chinese): Capital structureFirm performanceStock returnsLife cyclePecking Order TheorySignaling TheoryVietnam
Keywords (in other languages): Capital structure, Firm performance, Stock returns, Life cycle, Pecking Order Theory, Signaling Theory, Vietnam
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  • This study aims to examine how the capital structure and several factors influence stock returns in different stages of business life cycle by employing the most recent data. To achieve this objective, this study used a panel data that includes 466 non-financial listed companies from 2017 to 2021 on Vietnamese stock exchange and the regression with fixed effects model (FEM). The findings show that capital structure has a positive effect on stock returns. Firm age, profitability, and growth opportunities are related positively to stock returns, while firm size is negatively linked to stock returns. Besides, the empirical results indicate that capital structure positively affects stock returns in pioneer, growth, and decline stages, while capital structure negatively affects stock returns in mature stage. Firm size has a negative influence on stock returns during the mature stage, while liquidity has a negative impact on stock returns during the decline stage. Firm age, profitability, and growth opportunities positively affect stock returns in different stages of life cycle. The empirical results of this study are consistent with the predictions of the pecking order theory and signaling theory that provide some help in understanding the financing behavior of firms in Vietnam.


    This study aims to examine how the capital structure and several factors influence stock returns in different stages of business life cycle by employing the most recent data. To achieve this objective, this study used a panel data that includes 466 non-financial listed companies from 2017 to 2021 on Vietnamese stock exchange and the regression with fixed effects model (FEM). The findings show that capital structure has a positive effect on stock returns. Firm age, profitability, and growth opportunities are related positively to stock returns, while firm size is negatively linked to stock returns. Besides, the empirical results indicate that capital structure positively affects stock returns in pioneer, growth, and decline stages, while capital structure negatively affects stock returns in mature stage. Firm size has a negative influence on stock returns during the mature stage, while liquidity has a negative impact on stock returns during the decline stage. Firm age, profitability, and growth opportunities positively affect stock returns in different stages of life cycle. The empirical results of this study are consistent with the predictions of the pecking order theory and signaling theory that provide some help in understanding the financing behavior of firms in Vietnam.

    TABLE OF CONTENTS ABSTRACT i ACKNOWLEDGEMENTS ii LIST OF TABLES v LIST OF FUGURES vi CHAPTER 1: INTRODUCTION 1 1.1 Research background 1 1.2 Motivation and contributions 2 1.3 Objectives 2 1.4 Organization of study 3 CHAPTER 2: LITERATURE REVIEW 3 2.1 Theoretical Framework 3 2.2 Hypothesis development 5 2.2.1 Literature Review of the relationship between capital structure and stock returns 5 2.2.2 The effect of life cycle on the relationship between capital structure and stock returns 7 CHAPTER 3: RESEARCH METHODOLOGY 11 3.1 Sample selection and data collection 11 3.2 Variable definition and measures 11 3.3 Model 14 CHAPTER 4: DATA FINDING AND ANALYSIS 16 4.1 Descriptive statistics 16 4.2 Correlation test results 18 4.3 Regression results 19 4.3.1 The effect of capital structure on firm performance 19 4.3.2 The effect of business cycle on the relationship between capital structure and stock returns 26 CHAPTER 5: CONCLUSION AND RECOMMENDATION 30 5.1 Conclusion 30 5.2 Recommendation 31 5.3 Limitations and further research 32 REFERENCES 33

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