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Original scientific article

DETERMINANTS OF FINANCIAL PERFORMANCE IN THE VIETNAMESE SECURITIES INDUSTRY USING PANEL DATA EVIDENCE FROM 80 FIRMS ACROSS MARKET TIERS

By
Minh Tien Cao Orcid logo ,
Minh Tien Cao

Faculty Faculty of Banking and Insurance, Academy of Finance, Vietnam

Be Thi Thanh Loan Orcid logo ,
Be Thi Thanh Loan

Academy of Finance, Hanoi, Vietnam

Truong Thị Duc Giang Orcid logo ,
Truong Thị Duc Giang

Faculty of Finance and Banking, Academy of Finance, Hung Yen Campus, Hung Yen, Vietnam

Huong Tra Pham Orcid logo ,
Huong Tra Pham

Faculty of Banking and Insurance, Academy of Finance, Hanoi, Vietnam

Mai Quynh Pham Orcid logo ,
Mai Quynh Pham

Mai Quynh Pham, Lecturer, Faculty of International Finance, Academy of Finance, Vietnam

Viet Ninh Vu Orcid logo
Viet Ninh Vu
Contact Viet Ninh Vu

Faculty of International Finance, Academy of Finance, Hanoi, Vietnam

Abstract

The fast-paced development of the securities industry of Vietnam led to higher competition among enterprises and the necessity to discover the factors that determine the financial performance of various market segments. There is scarce literature concerning the financial performance of small, unlisted and UpCom securities firms, as previous studies concentrated mainly on listed firms, especially those located on HOSE. The aim of this study is to fill the gap by conducting an empirical study of the determinants of financial performance of Vietnamese securities firms at all market levels. Originality of this study consists of creating an extensive panel dataset of 80 securities firms and 238 observations for 2022-2024 with the inclusion of corporate governance, financial features of the company and macroeconomic factors. Quantitative panel longitudinal research design was utilized, and estimation approaches were performed sequentially, namely Pooled Ordinary Least Squares (OLS), Fixed Effects Model (FEM), Random Effects Model (REM) and Feasible Generalized Least Squares (FGLS). The financial performance of the sample firms was gauged using the following variables: Return on Assets (ROA), Return on Equity (ROE) and Return on Sales (ROS). From the results using FGLS method, it can be noted that firm size has been found to be the single most significant positive determinant of performance (ROA: β=0.0099; ROE: β=0.0140; ROS: β=0.0747, p<0.001), indicating the significance of economies of scale in the securities industry. Board gender positively impacts ROA and ROE, while CEO duality negatively impacts ROS. On the other hand, there is a negative impact of the fixed assets ratio and GDP growth on the financial performance of the firms, while inflation positively impacts ROE and ROS. It can be concluded that organizational size, diversity in governance and resource management have been established as key determinants of securities firm performance.

References

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Citation

This is an open access article distributed under the  Creative Commons Attribution Non-Commercial License (CC BY-NC) License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. 

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