THE IMPACT OF CAPITAL INTENSITY ON FINANCIAL PERFORMANCE O F MANUFACTURING ENTERPRISES LISTED IN VIETNAM

Abstract

This study was conducted to examine the relationship between capital intensity and financial performance of
230 manufacturing enterprises listed on two stock exchanges, HNX and HOSE, in the period 2015 - 2022 with 1,734
observations. The independent variable is capital intensity measured by the ratio between the total value of fixed
assets and the total net revenue of the enterprise. The dependent variable is financial performance measured
through the Tobin'Q indicator. In addition, control variables including enterprise size, financial leverage ratio, and
liquidity are also included in the research model. Using descriptive statistics, correlation testing and multivariate
regression analysis using OLS, FEM, REM models then comparing and finding the optimal model. Next, the authors
tested heteroscedasticity, autocorrelation and corrected it using the FGLS method to have a reliable model. The
results show that capital intensity, financial leverage, and liquidity have a negative relationship with financial
performance, while company size has a positive impact on financial performance. Through this research article, the
authors provide some recommendations for investors to have the right perspective when deciding to invest in
businesses.