THE IMPACT OF CAPITAL STRUCTURE ON FIRM VALUE IN VIETNAM

The article examines the impact of capital structure on firm value of 128 companies listed on the Ho Chi Minh City Stock Exchange (HOSE) and Hanoi Stock Exchange (HNX) in the period of 2010-2018. The research used the panel data regression methods including pooled OLS, fixed effects model (FEM) and random effects model (REM), after performing the testing and overcoming of the selected model, the study applied the generalized method of moments (GMM). The results show that the capital structure with the proxy variable is debt to total assets ratio (DA), short-term debt ratio (SDA), long-term debt ratio (LDA) possess a positive impact on firm value with the proxy variable Tobin's Q index. The study also shows that the factors including return on asset (ROA), enterprise size (SIZE), age of business (AGE) have the same impact on firm value with capital structure, but growth potential (GROWTH) gives the opposite result in the absence of industry dummy variables. In addition, the study has provided scientific evidence on the impact of industry differences on firm value, with manufacturing, business and trade having a greater corporate value than technology. But the services and construction and building materials industries have had the opposite result. Research results have proposed a number of recommendations with a scientific basis for financial managers in making recommendations to increase the value of listed companies listed on the stock market of Vietnam.