International Journal of

ADVANCED AND APPLIED SCIENCES

EISSN: 2313-3724, Print ISSN: 2313-626X

Frequency: 12
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 Volume 10, Issue 12 (December 2023), Pages: 142-152

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 Original Research Paper

An analysis of the interaction between leverage and market value: Evidence from the Ho Chi Minh City Stock Exchange in Vietnam

 Author(s): 

 Long Thanh Pham 1, Thu Thi Minh Vu 1, Linh Ha Nguyen 1, Mo Tran Thi 2, *

 Affiliation(s):

 1Faculty of Accounting Principal, School of Accounting and Auditing, National Economics University, Hanoi, Vietnam
 2Faculty of Business and Economics, Phenikaa University, Hanoi, Vietnam

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 * Corresponding Author. 

  Corresponding author's ORCID profile: https://orcid.org/0000-0002-9163-0985

 Digital Object Identifier (DOI)

 https://doi.org/10.21833/ijaas.2023.12.016

 Abstract

This paper analyzes the relationship between leverage and market value among all firms listed on the Ho Chi Minh City Stock Exchange in Vietnam. Leverage and firm value are crucial concepts in the business world, making this topic of great interest to many researchers. However, previous studies have mainly focused on the impact of leverage on individual firms, neglecting the potential influence of industry-level leverage on firm value. We analyze the impact of leverage on firm value at both the firm and industry levels. We use two econometric models: one-step linear regression and hierarchical regression. Hierarchical regression, also known as a multilevel model, allows us to examine how firm value determinants affect market value at three levels: observation, firm, and industry. If this is the case, single-level regression estimation may produce biased results. Our prediction holds: the research data show stratification. Both firm-level and industry-level leverage have significant negative effects on firm market value. Here, the multilevel model can provide more precise and unbiased results than single-level regression. We contribute to the literature on the relationship between leverage and firm value in the Vietnamese market, where managers consider not only firm-level leverage but also industry-level leverage when making capital structure decisions.

 © 2023 The Authors. Published by IASE.

 This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/).

 Keywords

 Leverage, Market value, Ho Chi Minh City Stock Exchange, Multilevel model, Vietnamese market

 Article history

 Received 14 June 2023, Received in revised form 30 October 2023, Accepted 29 November 2023

 Funding

This research is funded by the National Economics University and Phenikaa University, Hanoi, Vietnam.

 Acknowledgment 

The authors would like to send our thanks to anonymous reviewers for their supportive comments and suggestions.

 Compliance with ethical standards

 Conflict of interest: The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

 Citation:

 Pham LT, Vu TTM, Nguyen LH, and Thi MT (2023). An analysis of the interaction between leverage and market value: Evidence from the Ho Chi Minh City Stock Exchange in Vietnam. International Journal of Advanced and Applied Sciences, 10(12): 142-152

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 Tables

 Table 1 Table 2 Table 3 Table 4 Table 5 Table 6 Table 7 Table 8 Table 9 Table 10 

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