Factors Affecting Profitability of Vietnamese Real Estate Firms: Employing Fixed Effect and Random Effect Models

Abstract

 Vietnam’s Real estate market in general and real estate firms in particular, despite their positive contributions to the national economic development, have significantly experienced various handicaps and challenges over past 10 years inlcuding the accessibility to credit finance. Especially, the tremendous impact of the Covid-19 pandemic on the worldwide economy has threatened domesitic and international capital flows to the Vietnam’s real estate market, subtantialy hurt the real estate firms’ profitability. Therefore, thoughtfully determing key elements contributing to the Vietnamese real estate firms’ profitability plays an indispensible role in directing those firms to proactively produce proper responses towards raising their profitability and then competitive advantages. This paper, by employing fixed effect and random effect models to investigate affecting factors on the profitability of 27 real estate firms listed on Ho Chi Minh Stock Exchange for the period of 2010 to 2019, finds that asset structure deteriorates firms’s profitability while leverage, firm size, and other factors, show the positive effect.