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Impact of Debt Structure, State Ownership on Business Performance in Energy Enterprises: A Case Study in Vietnam

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  • Hung, Dang Ngoc

Abstract

This study examines the impact of debt structure and the interaction of state ownership on business performance of energy enterprises in Vietnam's stock exchange. Data in the study were collected in the period 2009-2020 with 665 observations, the estimated results by the GLS regression model show that short-term debt and long-term debt have a negative impact on business performance when measured by ROA and Tobin's Q. In energy enterprises in Vietnam, the state often holds the dominant stock, so in this study, we consider the impact of the interaction margin of state ownership, this study finds that the interaction of state ownership and short-term debt have a positive effect on business performance measured by ROA. In addition, the study also looks into control variables, namely firm size, liquidity ratio and asset structure that have a positive impact on business performance. We provide some recommendations to improve capital structure and business performance: Energy companies need to build an optimal capital structure to maximize business value; Investors can quantify the model to decide whether or not to invest or how much to invest in an energy business; The government needs to look into and consider holding a controlling stake in energy enterprises that are really necessary and bring good business results.

Suggested Citation

  • Hung, Dang Ngoc, 2022. "Impact of Debt Structure, State Ownership on Business Performance in Energy Enterprises: A Case Study in Vietnam," OSF Preprints nhp8v, Center for Open Science.
    • Handle: RePEc:osf:osfxxx:nhp8v
    DOI: 10.31219/osf.io/nhp8v
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    References listed on IDEAS

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    4. Nguyen Thi Thanh Phuong & Dang Ngoc Hung & Vu Thi Thuy Van & Ngo Thanh Xuan, 2020. "Effect of Debt Structure on Earnings Quality of Energy Businesses in Vietnam," International Journal of Energy Economics and Policy, Econjournals, vol. 10(3), pages 396-401.
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