THE EFFECT OF SIZE AND GROWTH ON LEVERAGE: EVIDENCE IN THE FISHERY AND REAL ESTATE INDUSTRY IN VIETNAM In Partial Fulfillment of the Requirements of the Degree of MASTER OF BUSINESS ADMINISTRATION In Finance By Mr: Nguyen ManhThang ID: MBA02032 International University - Vietnam National University HCMC August 2013 THE EFFECT OF SIZE AND GROWTH ON LEVERAGE: EVIDENCE IN THE FISHERY AND REAL ESTATE INDUSTRY IN VIETNAM In Partial Fulfillment of the Requirements of the Degree of MASTER OF BUSINESS ADMINISTRATION In Finance by Mr: Nguyen Manh Thang ID: MBA02032 International University - Vietnam National University HCMC August 2013 Under the guidance and approval of the committee, and approved by all its members, this thesis has been accepted in partial fulfillment of the requirements for the degree Approved: -Chairperson Committee member ’ -Committee member -Committee member Committee member Committee member Acknowledgement To complete this thesis, I have been benefited from the following people First of all, I would like to express my special thanks to my advisor –Doctor Nguyen Kim Thu – who recommended the research idea to me and for all the enthusiastic instruction and encouragement during the time I this thesis Besides, I would like to dedicate my gratitude to IU lecturers who communicated abstruse knowledge to me during MBA program, and the members of the Examination Committee for taking time and giving valuable comments to improve this study I also want to give my sincere thanks to my friends and my classmate who are my inspiration and always help me release stressful Last but not least, I want to express my loving thanks to my family who always stand beside me My greatest gratitude is to my wife, Ngan My MBA program in IU VNU would have not been completed without her love and encouragement HCM City, August 2013 NGUYEN MANH THANG i Plagiarism Statements I would like to declare that, apart from the acknowledged references, this thesis either does not use language, ideas, or other original material from anyone; or has not been previously submitted to any other educational and research programs or institutions I fully understand that any writings in this thesis contradicted to the above statement will automatically lead to the rejection from the MBA program at the International University – Vietnam National University Hochiminh City ii Copyright Statement This copy of the thesis has been supplied on condition that anyone who consults it is understood to recognize that its copyright rests with its author and that no quotation from the thesis and no information derived from it may be published without the author’s prior consent © Nguyen Manh Thang/ MBA 02032/2013 iii Table of Contents CHAPTER I – INTRODUCTION 1.1 Rationale 1.2 Research objectives 1.3 Scope and limitation of the study 1.4 Research structure CHAPTER II – LITERATURE REVIEW 2.1 Theories and empirical studies that relate to the correlation between size and leverage 2.1.1 Pecking order theory 2.1.2 Trade off theory 10 2.1.3 Empirical studies 10 2.2 Theories and empirical studies that relate to the correlation between growth and leverage 11 2.2.1 The trade-off theory 11 2.2.2 Empirical studies 11 2.3 Other theories and empirical studies that relate to the correlation between controlled variables and leverage 13 2.3.1 Model of theories 13 2.3.2 Other empirical studies 17 2.3.3 Previous researches in Vietnam 22 2.4 A theoretical model of the determinants of capital structure 23 2.4.1 The model 23 CHAPTER III – DATA AND METHODOLOGY 25 3.1 Sampling design 25 3.2 Data collection methods 25 3.3 Variables 26 3.4 Size: it is the independence variable in the model and measured by Natural Log Turnover 26 3.5 Growth (investment opportunities) 27 3.6 Asset structure 28 3.7 Non-debt tax shield 28 3.8 Debtors 29 3.9 Dummy variables 29 iv 3.10 Framework: 30 CHAPTER IV - FINDINGS 33 4.1 Descriptive Statistics 33 4.2 Empirical results 35 CHAPTER V –CONCLUSIONS 42 5.1 Summary of the thesis 42 5.2 Limitations 43 5.3 Main implications 43 5.4 Suggestion for future research 44 v List of Tables Table Production of fishery by area in Viet Nam Table 2: Predicted signs on the proxies for the competing leverage determinants theories 31 Table 3: Descriptive statistics of all variable of entire sample 34 Table 4:Descriptive statistics of all variable of Fishery sector 34 Table 5: Descriptive statistics of all variable of Real estate sector 34 Table 6: Correlation of independent variables 35 Table 7: Redundant Fixed Effect Tests 36 Table 8: Hausman Test result 36 Table 9: Fixed effect model 37 Table 10: Fixed effect model in fishery companies 38 Table 11: Fixed effect model in real estate companies 39 vi List of Abbreviation Abbreviation Equivalence FEM Fixed Effect Model Obs Observation OLS Ordinary Least Square REM Random Effect Model Std Dev Standard Deviation vii Abstract The study analyzes the factors determining the capital structure of the Vietnam enterprises The analysis grounds on M&M, the agency theory, trade-off theory and the pecking order theory In particular, the study provides a qualitative and quantitative analysis about relationship between size and leverage, the relationship between growth and leverage in fishery and real estate industry in HOSE This analysis bases on definition of the expected relationships that one might consider between the referred variables and the total debt ratio In this regard, the analysis will conduct by means of considering a survey of 54 companies in Vietnam where a hierarchical regression model will allow comparison of the hypotheses made viii Nguyen, T.D.K., Ramachandran, N., 2006 Capital structure in Small and Medium sized Enterprises: The case of Vietnam ASEAN Economic Bulletin 23(2), 192211 Pettit, R and Singer, R., (1985) Small Business Finance: A Research Agenda Financial Management, Autumn, 47–60 Rajan, R G &Zingales, L., (1995) What Do We Know about Capital Structure? Some Evidence from International Data Journal of Finance, 50, 5, 1421-1460 Singh, A., (1995), Corporate financial patterns in industrialising economies – A comparative international study, IFC Technical Paper No 2, Washington D.C.: International Finance Corporation Smith, C.W., Jr and Watts, R.L (1992).The Investment Opportunity Set and Corporate Financing Dividend and Compensation Policies Journal of Financial Economics, 32, 263-92 Titman, S and Wessels, R (1988) The Determinants of Capital Structure Choice The Journal of Finance, 43, 1, 1-19 Viswanath, P.V and M Frierman, (1995), Asset fungibility and equilibrium capitalstructure, Journal of Economics and Business, 47 (4), 319-334 Wiwattanakantang Y (1999) An empirical study on the determinants of the capital structureof Thai firms.Pacific-Basin Finance Journal, Vol 7, 371-403 48 Yau, Josephine, Evan Lau and Audrey Liwan, (2008).Do Malaysia Firms Practice the Pecking Order Theory in Their Capital Structure? (Proceedings of the MFA Conference 2008, Malaysia) 49 Appendix A Sample of the research Firm AAM Year 2010 Lev 0.1197 Size 13.1232 SizeDRS 0.0000 Growth 0.3194 GrowthDRS 0.0000 Assets 0.2272 Tx shield 0.0972 Debtors 0.3436 Dummy Fishery Dummy Real Estate AAM 2011 0.1298 13.3681 0.0000 0.0000 0.0000 0.2216 0.1210 0.2936 AAM 2012 0.1049 13.0931 0.0000 0.0000 0.0000 0.2047 0.1669 0.1760 ACL 2010 0.6856 13.8910 0.0000 0.9717 0.0000 0.2653 0.0438 0.3513 ACL 2011 0.6243 14.0686 0.0000 0.5406 0.0000 0.2526 0.0602 0.3591 ACL 2012 0.6682 13.8472 0.0000 0.3781 0.0000 0.2648 0.0772 0.2763 ABT 2010 0.2619 13.4375 0.0000 0.7478 0.0000 0.0837 0.0644 0.2158 ABT 2011 0.1795 13.2066 0.0000 0.0000 0.0000 0.0981 0.0956 0.1725 ABT 2012 0.2486 13.3601 0.0000 0.0000 0.0000 0.0858 0.0922 0.0874 AGD 2010 0.6328 13.2960 0.0000 0.7732 0.0000 0.3590 0.0841 0.2061 AGD 2011 0.5790 13.6399 0.0000 1.0985 0.0000 0.2747 0.0876 0.2610 AGD 2012 0.4236 13.6583 0.0000 1.3350 0.0000 0.2239 0.0653 0.1327 AGF 2010 0.5396 14.3458 0.0000 0.0739 0.0000 0.3628 0.1290 0.2451 AGF 2011 0.6183 14.7939 0.0000 0.1647 0.0000 0.2528 0.1164 0.3551 AGF 2012 0.5774 14.8439 0.0000 0.3916 0.0000 0.2699 0.1510 0.2591 ANV 2010 0.2153 14.1747 0.0000 0.0000 0.0000 0.3438 0.1710 0.2950 ANV 2011 0.3022 14.3781 0.0000 0.0000 0.0000 0.3025 0.2051 0.2653 ANV 2012 0.4192 14.3628 0.0000 0.5186 0.0000 0.2228 0.2071 0.2223 ATA 2010 0.7918 13.4680 0.0000 1.0144 0.0000 0.2191 0.0439 0.3151 ATA 2011 0.7740 13.3254 0.0000 0.6197 0.0000 0.2331 0.0602 0.2252 ATA 2012 0.7748 12.9400 0.0000 0.0000 0.0000 0.2308 0.0746 0.2362 AVF 2010 0.7267 14.2770 0.0000 0.9926 0.0000 0.1405 0.0378 0.5701 AVF 2011 0.7937 14.4380 0.0000 0.8580 0.0000 0.1366 0.0387 0.4538 AVF 2012 0.7295 14.4431 0.0000 0.4633 0.0000 0.1933 0.0550 0.4360 CMX 2010 0.8381 14.1895 0.0000 0.1406 0.0000 0.0977 0.1725 0.1725 CMX 2011 0.8222 13.9726 0.0000 0.2146 0.0000 0.1205 0.1426 0.1426 CMX 2012 0.7688 13.8300 0.0000 0.2757 0.0000 0.1643 0.1205 0.1205 FBT 2010 0.6740 12.9346 0.0000 0.0000 0.0000 0.5311 0.3157 0.1879 FBT 2011 0.5916 12.2192 0.0000 0.0000 0.0000 0.5831 0.4025 0.2551 FBT 2012 0.8736 11.7640 0.0000 0.2823 0.0000 0.4876 0.3437 0.1454 FMC 2010 0.6689 14.2008 0.0000 0.7056 0.0000 0.1872 0.3255 0.1795 FMC 2011 0.7793 14.4569 0.0000 0.4981 0.0000 0.1387 0.2260 0.1569 FMC 2012 0.6590 14.2447 0.0000 0.0000 0.0000 0.2495 0.4189 0.2803 HVG 2010 0.5884 15.3043 0.0000 0.9919 0.0000 0.2052 0.0682 0.8225 HVG 2011 0.6005 15.8689 0.0000 0.8129 0.0000 0.1615 0.0726 1.2381 HVG 2012 0.5908 15.8694 0.0000 0.4411 0.0000 0.1515 0.0868 1.2115 ICF 2010 0.5247 12.6310 0.0000 0.0000 0.0000 0.1837 0.1495 0.3300 ICF 2011 0.5706 12.7397 0.0000 0.2892 0.0000 0.1510 0.1694 0.2856 ICF 2012 0.5843 11.5805 0.0000 0.3000 0.0000 0.1633 0.1862 0.1150 MPC 2010 0.6379 15.4037 0.0000 0.8476 0.0000 0.2487 0.0417 0.1191 MPC 2011 0.7443 15.7669 0.0000 1.3588 0.0000 0.2606 0.0382 0.0747 MPC 2012 0.7427 15.8694 0.0000 0.7928 0.0000 0.2591 0.0615 0.0919 NGC 2010 0.8186 11.6851 0.0000 1.0584 0.0000 0.3796 0.0611 0.3874 NGC 2011 0.8505 12.3794 0.0000 0.9435 0.0000 0.4688 0.0731 0.2301 NGC 2012 0.8435 12.3306 0.0000 0.3970 0.0000 0.4981 0.1077 0.2235 SJ1 2010 0.2870 12.1867 0.0000 0.5198 0.0000 0.5817 0.1601 0.1604 SJ1 2011 0.4091 12.3998 0.0000 0.6744 0.0000 0.5112 0.1543 0.1483 SJ1 2012 0.4803 12.7074 0.0000 0.8522 0.0000 0.4148 0.1165 0.2449 TS4 2010 0.5588 12.8482 0.0000 1.1158 0.0000 0.5235 0.0457 0.0895 TS4 2011 0.6568 13.3833 0.0000 0.9635 0.0000 0.4338 0.0589 0.1089 TS4 2012 0.7263 13.6296 0.0000 0.8139 0.0000 0.3127 0.0663 0.1028 VNH 2010 0.5189 11.2778 0.0000 0.5290 0.0000 0.3404 0.1313 0.2837 VNH 2011 0.5452 11.3861 0.0000 0.5652 0.0000 0.4309 0.1488 0.1738 VNH 2012 0.5293 11.4854 0.0000 0.3680 0.0000 0.5192 0.1584 0.2393 ASM 2010 0.6773 13.2235 13.2235 0.2143 0.2143 0.1717 0.0025 0.2317 ASM 2011 0.5160 13.6804 13.6804 0.4077 0.4077 0.1272 0.0035 0.2133 ASM 2012 0.5713 13.8334 13.8334 0.1335 0.1335 0.1501 0.0038 0.2511 BCI 2010 0.4992 13.5890 13.5890 0.2780 0.2780 0.2639 0.0084 0.0836 BCI 2011 0.5522 12.2871 12.2871 0.2099 0.2099 0.2470 0.0090 0.0529 BCI 2012 0.4727 12.2035 12.2035 0.0000 0.0000 0.1474 0.0121 0.0586 CCL 2010 0.3610 11.9974 11.9974 1.0397 1.0397 0.0230 0.0026 0.1366 CCL 2011 0.5221 11.2787 11.2787 0.2839 0.2839 0.0284 0.0026 0.1263 CCL 2012 0.4781 10.9815 10.9815 0.0907 0.0907 0.0283 0.0045 0.1269 CLG 2010 0.6579 11.6585 11.6585 0.2615 0.2615 0.2644 0.0112 0.1489 CLG 2011 0.8181 12.4521 12.4521 0.6613 0.6613 0.1403 0.0101 0.3785 CLG 2012 0.7284 11.8621 11.8621 0.7614 0.7614 0.3408 0.0127 0.2961 D11 2010 0.4923 11.5038 11.5038 0.0000 0.0000 0.0273 0.0286 0.2491 D11 2011 0.4826 12.1948 12.1948 0.0000 0.0000 0.0162 0.0261 0.1480 D11 2012 0.4752 9.6963 9.6963 0.2228 0.2228 0.0098 0.0302 0.1415 D2D 2010 0.6128 12.3049 12.3049 0.2244 0.2244 0.3048 0.1551 0.1503 D2D 2011 0.5436 12.4257 12.4257 0.0000 0.0000 0.4355 0.1944 0.1442 D2D 2012 0.5965 12.6182 12.6182 0.0103 0.0103 0.0115 0.0169 0.1374 DIG 2010 0.4114 13.9933 13.9933 0.2879 0.2879 0.0674 0.0291 0.2410 DIG 2011 0.4777 13.5543 13.5543 0.1679 0.1679 0.1205 0.0411 0.2434 DIG 2012 0.4981 13.5739 13.5739 0.1037 0.1037 0.1120 0.0439 0.2305 DXG 2010 0.5798 12.8327 12.8327 0.6266 0.6266 0.0201 0.0054 0.3005 DXG 2011 0.4841 12.5651 12.5651 0.3093 0.3093 0.0166 0.0067 0.3909 DXG 2012 0.2901 12.9079 12.9079 0.0936 0.0936 0.0161 0.0113 0.3450 HAG 2010 0.4660 15.3251 15.3251 0.5580 0.5580 0.2349 0.0107 0.2324 HAG 2011 0.6058 14.9630 14.9630 0.5485 0.5485 0.3082 0.0127 0.2157 HAG 2012 0.6542 15.2983 15.2983 0.3337 0.3337 0.4171 0.0136 0.2183 HDC 2010 0.5714 13.0056 13.0056 0.4886 0.4886 0.0440 0.0366 0.1753 HDC 2011 0.5398 12.9021 12.9021 0.3013 0.3013 0.0438 0.0338 0.1461 HDC 2012 0.5524 12.5462 12.5462 0.0811 0.0811 0.0392 0.0355 0.1198 HQC 2010 0.0528 13.9839 13.9839 0.7597 0.7597 0.0036 0.0037 0.5749 HQC 2011 0.7232 12.2357 12.2357 0.2287 0.2287 0.0027 0.0034 0.3227 HQC 2012 0.7252 12.6172 12.6172 0.0000 0.0000 0.0030 0.0039 0.3455 IDI 2010 0.6088 13.7607 13.7607 0.5671 0.5671 0.2996 0.0140 0.4238 IDI 2011 0.6269 13.9085 13.9085 0.3449 0.3449 0.2950 0.0239 0.3193 IDI 2012 0.6316 14.1002 14.1002 0.0675 0.0675 0.2846 0.0411 0.3268 IJC 2010 0.8007 12.7671 12.7671 1.4848 1.4848 0.1508 0.0341 0.2921 IJC 2011 0.2835 14.0936 14.0936 1.6176 1.6176 0.1461 0.0375 0.1925 IJC 2012 0.3457 13.3257 13.3257 0.0768 0.0768 0.1340 0.0421 0.0612 ITC 2010 0.2948 13.6293 13.6293 0.0000 0.0000 0.0198 0.0072 0.2563 ITC 2011 0.3467 12.0264 12.0264 0.0000 0.0000 0.0185 0.0079 0.1725 ITC 2012 0.3354 11.8978 11.8978 0.0000 0.0000 0.0185 0.0093 0.1308 KAC 2010 0.4431 11.5404 11.5404 0.2036 0.2036 0.0068 0.0023 0.0200 KAC 2011 0.6129 10.5778 10.5778 0.1645 0.1645 0.0055 0.0030 0.0285 KAC 2012 0.3962 12.5543 12.5543 0.0000 0.0000 0.0078 0.0062 0.1027 KBC 2010 0.5422 13.7255 13.7255 0.6963 0.6963 0.0300 0.0021 0.2682 KBC 2011 0.5554 13.3592 13.3592 0.1568 0.1568 0.0324 0.0035 0.1683 KBC 2012 0.5841 12.5474 12.5474 0.0077 0.0077 0.0344 0.0053 0.1947 KDH 2010 0.3876 13.5564 13.5564 0.7251 0.7251 0.0035 0.0015 0.2537 KDH 2011 0.4017 12.3328 12.3328 0.5355 0.5355 0.0034 0.0021 0.2181 KDH 2012 0.4332 11.2693 11.2693 0.0000 0.0000 0.0023 0.0028 0.2044 NBB 2010 0.6686 13.0907 13.0907 0.7574 0.7574 0.0708 0.0143 0.0489 NBB 2011 0.5995 12.9307 12.9307 0.2533 0.2533 0.1094 0.0182 0.0537 NBB 2012 0.5658 12.9598 12.9598 0.1173 0.1173 0.0934 0.0202 0.1077 OGC 2010 0.4990 14.2653 14.2653 4.6297 4.6297 0.0783 0.0021 0.3086 OGC 2011 0.5472 14.1394 14.1394 0.4115 0.4115 0.0997 0.0127 0.3038 OGC 2012 0.6544 14.1625 14.1625 0.2641 0.2641 0.0911 0.0098 0.3435 PDR 2010 0.5917 14.2691 14.2691 0.0800 0.0800 0.0819 0.0018 0.0330 PDR 2011 0.6934 11.7458 11.7458 0.1198 0.1198 0.0402 0.0007 0.0562 PDR 2012 0.7203 11.5565 11.5565 0.1661 0.1661 0.0378 0.0009 0.0397 PFL 2010 0.4371 10.2330 10.2330 0.0000 0.0000 0.1100 0.0031 0.1751 PFL 2011 0.2302 12.7766 12.7766 0.0000 0.0000 0.3837 0.0059 0.1093 PFL 2012 0.2950 7.6686 7.6686 0.0000 0.0000 0.3906 0.0054 0.0830 PPI 2010 0.5547 12.9830 12.9830 0.2635 0.2635 0.0623 0.0093 0.4822 PPI 2011 0.6693 11.9556 11.9556 0.2397 0.2397 0.0524 0.0137 0.3707 PPI 2012 0.6397 12.1630 12.1630 0.0448 0.0448 0.0408 0.0149 0.3767 QCG 2010 0.5152 13.4832 13.4832 0.7023 0.7023 0.1290 0.0032 0.1560 QCG 2011 0.5387 12.8940 12.8940 0.5443 0.5443 0.1369 0.0038 0.1498 QCG 2012 0.5395 14.1270 14.1270 0.0473 0.0473 0.1527 0.0058 0.1396 RCL 2010 0.4243 11.9111 11.9111 0.0413 0.0413 0.0866 0.0107 0.2083 RCL 2011 0.4399 11.9357 11.9357 0.1773 0.1773 0.0634 0.0160 0.1590 RCL 2012 0.3777 11.7848 11.7848 0.0796 0.0796 0.0637 0.0186 0.1291 REE 2010 0.4097 14.4076 14.4076 0.4512 0.4512 0.0319 0.0059 0.1210 REE 2011 0.2701 14.4091 14.4091 0.2832 0.2832 0.0066 0.0062 0.1066 REE 2012 0.3513 14.6892 14.6892 0.1551 0.1551 0.0065 0.0059 0.1207 SCR 2010 0.7113 13.9262 13.9262 0.1996 0.1996 0.0012 0.0009 0.1952 SCR 2011 0.6748 13.2255 13.2255 0.0279 0.0279 0.0027 0.0031 0.2331 SCR 2012 0.6255 13.2825 13.2825 0.0000 0.0000 0.0033 0.0037 0.0825 SJS 2010 0.5106 13.8321 13.8321 0.9038 0.9038 0.7024 0.0090 0.0813 SJS 2011 0.6268 11.8461 11.8461 0.3394 0.3394 0.7400 0.0034 0.0699 SJS 2012 0.7162 11.1834 11.1834 0.1167 0.1167 0.0432 0.0047 0.0574 TDH 2010 0.3631 13.2308 13.2308 0.3157 0.3157 0.1056 0.0133 0.2461 TDH 2011 0.3754 13.1862 13.1862 0.1179 0.1179 0.0996 0.0182 0.2076 TDH 2012 0.3648 12.4624 12.4624 0.0000 0.0000 0.0851 0.0226 0.1924 SZL 2010 0.3881 11.7719 11.7719 0.1195 0.1195 0.2450 0.2606 0.0363 SZL 2011 0.5234 11.7770 11.7770 0.1264 0.1264 0.1711 0.1370 0.0718 SZL 2012 0.5274 11.7679 11.7679 0.1781 0.1781 0.1906 0.1448 0.0446 TIX 2010 0.5867 13.4649 13.4649 0.0000 0.0000 0.2469 0.3524 0.2264 TIX 2011 0.5265 13.8487 13.8487 0.0000 0.0000 0.2334 0.3716 0.0950 TIX 2012 0.4802 13.4888 13.4888 0.0000 0.0000 0.2194 0.3783 0.0224 TKC 2010 0.7002 13.0016 13.0016 0.0106 0.0106 0.1396 0.0201 0.2881 TKC 2011 0.6235 13.1020 13.1020 0.0000 0.0000 0.0495 0.0333 0.2224 TKC 2012 0.7002 12.6901 12.6901 0.0000 0.0000 0.0484 0.0347 0.2362 UDC 2010 0.6607 13.0498 13.0498 0.4290 0.4290 0.2630 0.0401 0.3131 UDC 2011 0.7218 13.0190 13.0190 0.2934 0.2934 0.2588 0.0399 0.2909 UDC 2012 0.7269 12.9757 12.9757 0.1128 0.1128 0.2895 0.0475 0.2582 UIC 2010 0.7265 13.7683 13.7683 0.0934 0.0934 0.1188 0.1021 0.3619 UIC 2011 0.7352 14.0216 14.0216 0.1205 0.1205 0.1668 0.1082 0.3801 UIC 2012 0.6738 14.2235 14.2235 0.0000 0.0000 0.1953 0.1535 0.3072 VCR 2010 0.4843 11.9525 11.9525 1.4917 1.4917 0.6318 0.0056 0.0855 VCR 2011 0.5260 11.3638 11.3638 0.6641 0.6641 0.3207 0.0103 0.0497 VCR 2012 0.6156 9.8234 9.8234 0.1201 0.1201 0.4623 0.0138 0.0150 VIC 2010 0.6346 15.1695 15.1695 1.6711 1.6711 0.1803 0.0017 0.2166 VIC 2011 0.7676 14.6544 14.6544 0.7405 0.7405 0.1833 0.0015 0.1446 VIC 2012 0.8052 15.8829 15.8829 0.5675 0.5675 0.1925 0.0149 0.0682 VPH 2010 0.6558 11.3393 11.3393 0.0000 0.0000 0.0190 0.0037 0.1132 VPH 2011 0.6916 11.4084 11.4084 0.1545 0.1545 0.0240 0.0032 0.1058 VPH 2012 0.7019 11.6546 11.6546 0.0930 0.0930 0.0213 0.0041 0.0701 Appendix B Variable definitions Dependent variable LEVERAGE (Long term liabilities+ Short term liabilities)/ Total assets LOGLEV Natural Log (LEVERAGE) Size of firm SIZE Natural Log (Turnover) Profitability of firm AVPROFIT Average of [(PROFIT,t),(PROFIT,t-1),(PROFIT,t-2)] PROFIT ProfitBefore Interest & Exceptional Items (PBIEI) / Total assets Firm growth GROWTH Rate of annual growth in assets over current and past years.Defined as:Squared root of [(TOTAL ASSETS t) / (TOTAL ASSETS t-2)] -1 Asset structure ASSETS FIXED ASSETS / TOTAL ASSETS LOGASST Natural Log (ASSETS) Non-debt tax shield TXSHIELD DEPRECIATION / TOTAL ASSETS LOGTAX Natural Log (TXSHIELD) Others DEBTORS Net debtors to assets: the ratio of debtors less creditors to total assets TOTALASSETS financial assets + inventories + other assets + investments + fixed assets = liabilities(short & long term) + deferred profit Appendix C Figure 1: Firm size of 18 companies in fishery industry listed on HOSE (2010-2011) Figure 2: Firm size of 18 companies in fishery industry listed on HOSE (2011-2012) 10 Figure 3: Growth opportunities of 18 companies in fishery industry listed on HOSE (2010-2011) Growth opportunities in fishery companies 2.5000 Percentage of growth 2.0000 1.5000 Growth 2011 1.0000 Growth 2010 0.5000 VNH TS4 SJ1 NGC ICF MPC HVG FMC FBT CMX AVF ATA ANV AGF AGD ABT ACL AAM 0.0000 Figure 4: Growth opportunities of 18 companies in fishery industry listed on HOSE(2011-2012) Growth opportunities in fishery companies 3.0000 2.0000 1.5000 Growth 2012 Growth 2011 1.0000 0.5000 VNH TS4 SJ1 NGC MPC ICF HVG FMC FBT CMX AVF ATA ANV AGF AGD ABT ACL 0.0000 AAM Percentage of growth 2.5000 11 Figure 5: Firm size of 30 companies in real estate industry listed on HOSE (20102011) Figure 6: Firm size of 30 companies in real estate industry listed on HOSE (20112012) 12 Figure 7: Growth opportunities of 30 companies in real estate industry listed on HOSE (2010-2011) Figure 8: Growth opportunities of 30 companies in real estate industry listed on HOSE (2011-2012) 13 ... size and leverage in real estate industry and fishery industry in Vietnam  Find out the relationship between growth opportunity and leverage in real estate industry and fishery industry in Vietnam. .. Test if the effect of size on leverage in fishery industry is higher than in real estate industry  Test if the effect of growth on leverage in fishery industry is higher than in real estate industry. . .THE EFFECT OF SIZE AND GROWTH ON LEVERAGE: EVIDENCE IN THE FISHERY AND REAL ESTATE INDUSTRY IN VIETNAM In Partial Fulfillment of the Requirements of the Degree of MASTER OF BUSINESS ADMINISTRATION