The determinants of firm value: An empirical study in listed trading companies in Vietnam

This study aims to investigate the importance of firm value and the factors that affect the firm value of trading companies listed on the Vietnamese stock exchange, thereby enhancing the current literature related to this topic in our country. The factors that affect firm value include firm size, capital structure, profitability, sales, and liquidity whereas firm value is represented by the value of equity. This work employed a data set with 925 observations, which are trading firms listed on the Vietnam Stock Exchange over a nine-year period from 2011 to 2019 with the support of STATA version 2016. Applying the quantitative method, we first find that firm size is of the greatest importance to firm value. It refers that the value of a large company is of a higher rank than a small company. On the other hand, capital structure is found to have a negative impact on firm value. Furthermore, we find that the other independent variables (profitability, sales, and liquidity) are statistically insignificant in the regression model. This means that those mentioned factors do not affect firm value. More importantly, the research also suggests that both firm size and capital structure are crucial for firm value in the trading industry in Vietnam.