Influencers of capital allocation : Case: Vietnamese technology industry from 2016 to 2019
Bui, Dang Huy (2020)
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Lataukset:
Bui, Dang Huy
2020
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Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:amk-2020101421313
https://urn.fi/URN:NBN:fi:amk-2020101421313
Tiivistelmä
The optimal capital allocation changes according to significant factors that are exclusive to a certain firm or industry. Besides, it varies in line with exterior factors, for example, economic health, culture, religion etc. Along these lines, instead of finding an exact optimal ratio, scholars prefer to do research on factors that affect decisions on the allocation development. From investigations on their interference to capital, firms’ decisions and risk management are better assessed.
The aim of this thesis was to scrutinize the significance in connections of particular factors: tangibility, firm profitability, liquidity, and size to decisions of public corporates on capital allocation within Vietnamese technology sector, limited to companies on stock market, from 2016 to 2019. From that, the author indicated current issues of capital allocation in the industry, then, proposed recommendations.
The theoretical framework covered ideas of capital structure: concepts, including optimal capital structure, WACC, risk, leverage, financial distress, taxation, agency cost, etc.; theorem with respect to capital allocation; and factors determining capital allocation decision: firm size, liquidity, profitability, etc.
In the thesis, capital allocation theories were reviewed and tested if they were applicable to Vietnamese technology industry. Therefore, deductive was an appropriate approach, with the help of quantitative method.
The empirical research’s database was in panel data, which is both time-series and cross-sectional. The data was retrieved from public annual reports. Meanwhile, literature review was based on textbooks and journals.
On the one hand, the findings confirmed that liquidity and tangibility were in positive correlation with short-term leverage, while firm size was in negative one. On the other hand, with long-term leverage, there was no valid correlation.
The aim of this thesis was to scrutinize the significance in connections of particular factors: tangibility, firm profitability, liquidity, and size to decisions of public corporates on capital allocation within Vietnamese technology sector, limited to companies on stock market, from 2016 to 2019. From that, the author indicated current issues of capital allocation in the industry, then, proposed recommendations.
The theoretical framework covered ideas of capital structure: concepts, including optimal capital structure, WACC, risk, leverage, financial distress, taxation, agency cost, etc.; theorem with respect to capital allocation; and factors determining capital allocation decision: firm size, liquidity, profitability, etc.
In the thesis, capital allocation theories were reviewed and tested if they were applicable to Vietnamese technology industry. Therefore, deductive was an appropriate approach, with the help of quantitative method.
The empirical research’s database was in panel data, which is both time-series and cross-sectional. The data was retrieved from public annual reports. Meanwhile, literature review was based on textbooks and journals.
On the one hand, the findings confirmed that liquidity and tangibility were in positive correlation with short-term leverage, while firm size was in negative one. On the other hand, with long-term leverage, there was no valid correlation.