The Impact of Debt on Corporate Profitability: Evidence from Vietnam

• 발행기관: 한국유통과학회
• 저자명: Van Toan NGO Th(i.) Xuan Huong TRAM Ba Thanh VU
• 간행물 정보: 『The Journal of Asian Finance, Economics and Business(JAFEB)』Vol. 7 No.11, 835~842쪽, 전체 8쪽
• 주제분류: 경제경영 > 경제학
• 파일형태: PDF
• 발행일자: 2020.11.30

영문 초록

The study aims to investigate the impact of debt on corporate profitability in the context of Vietnam. The paper investigates the impact of debt on corporate profitability in non-finance listed companies on the Vietnam stock market. The panel data of the research sample includes 118 non-financial listed companies on the Vietnam stock market for a period of nine years, from 2009 to 2017. The Generalized Method of Moments (GMM) is employed to address econometric issues and to improve the accuracy of the regression coefficients. In this research, corporate profitability is measured as the return of EBIT on total assets. The debt ratio is a ratio that indicates the proportion of a company’s debt to its total assets. Firm sizes, tangible assets, growth rate, and taxes are control variables in the study. The empirical results show that debt has a statistically significant negative effect on corporate profitability. The result also shows this effect is stronger in a non-linear (concave) way, we show that the debt ratio has nonlinear effects on corporate profitability. From this, experimental evidence shows that the optimal debt ratio is 38.87%. This evidence provides a new insight to managers of the non-finance companies on how to improve the firm’s profitability with debt.

목차

1. Introduction

2. Data and Variables

3. Methodology

4. Correlation Analysis

5. Econometric Analysis

6. Conclusion

References

키워드

Debt Profitability Optimal Debt Non-Linear