Research the impact of financial leverage on the profitability of listed real estate enterprises in Vietnam

ther non-linear combinations of the fitted values help explain the response variable. H0: Model has the correct function form H1: Model does not have the correct function form With a confidence level of 95%, P- value is larger than 0.05. The null hypothesis cannot be rejected based on the data. Moreover, P-value Model 1 = 0,214885 P-value Model 2 = 0.228748 Thus, both models have the correct functional form. Jacque-Bera Test Whether sample data have the skewness and kurtosis matching a normal distribution. H0: u is normally distributed H1: u is not normally distributed With a confidence level of 95%, P- value is smaller than 0.05. Therefore, H0 is rejected and H1 is accepted. Moreover P-value Model 1 = 0 P-value Model 2 = 0,054217 Thus, Model 1 has u not normally distributed. Model 2 has u normally distributed Source: Compiled by the authors based on research results 5. The conclusion and recommendations 5.1. The conclusion from the research results The results from analysing the correlation between FL and the profitability including ROA, ROE, ROS, and ROCE illustrate that: (1) FL has no impacts on ROS and ROCE, (2) FL has a negative impact on ROA and (3) FL has a positive impact on ROE. 736 - FL has no impacts on ROS and ROCE: Research results showed that: Although FL plays an important role in evaluating ROA and ROE but while ROA is influenced negatively by FL, ROE has a positive correlation in accordance with FL. These results are consistent with previous studies, both theoretical and empirical. - FL has a negative impact on ROA: From the results in Chapter 4, it is shown that FL has a great impact on ROA. With a confidence level of 95%, the change of FL relates to 21% the change of ROA. With 232 observations from audited financial reports and testing using EVIEW 10.0, it is assumed that if FL increases by 1%, ROA will reduce by 0.01167%. Clearly, increasing depts causes total assets increase. But, if that increase does not create enough profit in correlation with the financial costs raising from the depts, ROA will completely decrease. This is a suitable result based on Trade-off theory and a lot of descriptive previous researches of Fama & French (1998), Simerly & Li (2000) and Nhu Le Thi (2017). - FL has a positive impact on ROE: The results in Chapter 4 show that the change of ROE can be explained by 75% the change of FL, with the conference level of 95%. With 232 observations from audited financial reports and testing using EVIEW 10.0, it is assumed that if FL increases by 1%, ROA will increase by 0.08%. This is an important conclusion that is consistent with the Dupont model analysis’s results. It is also matched with the M&M theory and many other published types of research, including Abor’s research (2005) and Gill’s research (2011). 5.2. Limitations Because the data that was collected and analysed is from secondary sources as well as many different websites, errors are inevitable. This is mostly because the observations in this research are not uniform (most of the observations are quarterly data; however, some are yearly data). Nevertheless, since the data used in this research is all relative, the characteristic of those observations are not affected by the scale of an enterprise. Moreover, in this research, only model 2, which shows the relationship between ROE and FLR, is optimal. This is because model 1 that shows the relationship between ROA and FLR has u is not normally distributed. This problem in model 1, however, is alleviated because the sample size used in this research is very large (232 observations). The bigger the sample size, the less significant the problem is to the accuracy of the whole model. 5.3. Recommendation 5.3.1. Recommendation to the State First of all, the State should create a legal environment for investment in real estate. At the same time, create favourable conditions for real estate credit. 737 Currently, due to concerns about the appearance of "bubble" real estate, the State Bank tends to strictly control the flow of money into the real estate market, especially long waiting for loans, as well as high-interest rates, have caused many difficulties for enterprises in the process of mobilizing resources for production and business activities. In such a situation, the State should have more timely, practical interventions to avoid cumbersome practices and loose monetary policy for investment enterprises. In addition, the State should promote the stable development of the stock market, and increase the transparency of information, thereby increasing the flow of money in the stock market and solving the problem of capital. 5.3.2. Recommendation to the Stock Exchanges. Because Vietnam's stock market is an emerging market with no solid foundation, unstable trading and restrictions on information verification, infrastructure constraints, especially Human Resources. As a result, investors are more sceptical about investing in securities, making it difficult for businesses to access capital. Therefore, in order to promote the development of the real estate market, the Stock Exchanges need to strengthen the supervision of transactions and listed companies, ensuring openness and transparency to help businesses have an equal environment for development. 5.3.3. Recommendation to the Real estate Agents. For listed real estate companies, the most important issue is profit, as investors will consider it before deciding whether to invest or not. Besides waiting for government support, businesses also have to look for opportunities and prevent risks. 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