Factors affecting the profitability of food companies listed on the Vietnam stock market

Abstract

The study aims to determine the factors affecting the profitability of the food companies listed on the Vietnam stock market. The study uses panel data with 198 observations of 22 food companies listed on the Vietnamese stock market in the period 2011-2019 into the regression analysis. With 3 methods POLS, FEM and REM; the author uses F test and Hausman test to select the appropriate model. The result show that REM is the most optimal model selected. However, the REM model still has variable variance defects and endogenous variables; therefore, the author uses GMM method to overcome the defects of the model. The results from the GMM regression model show that the profitability of food companies listed on the Vietnamese stock market is affected by internal factors including size, risk, past profitability, leverage, and macro factors such as: economic growth, inflation, calamity. From there, the author proposes recommendations to improve the profitability of these enterprises.