Open AccessImpact of Cost Control on Business Efficiency of Small and Medium Sized Enterprises in Thai Binh, Vietnam
Author(s) -
Dang Ngoc Hung,
Thi Viet Ha Hoang,
Mạnh Dũng Trần
Publication year - 2017
Publication title -
international finance and banking
Language(s) - English
Resource type - Journals
ISSN - 2374-2089
DOI - 10.5296/ifb.v4i2.12030
Subject(s) - return on assets , business , leverage (statistics) , operating leverage , finance , stock exchange , machine learning , profitability index , computer science
This study is conducted for investigating the impact of cost control on business efficiency of small and medium-sized enterprises (SMEs) in the area of Thai Binh, Vietnam for the period from 2012 to 2014. Impacting factors were built and verified on business efficiency of SMEs including (i) Cost of goods sold ratio, (ii) Financial expense ratio, (iii) Administration expense ratio, (iv) Firm size, (v) Financial leverage, (vi) Assets structure, and on Pre-tax return on sales ratio and Pre-tax return on assets ratio. The study employed regression models of OLS, FEM, REM and GLS with multi-year dataset of SMEs in Thai Binh province. The results show that the ratios of cost of goods sold, financial leverage, and administration expenses have negative relation with business efficiency, but affecting Return on sales (ROS) and Return on assets (ROA). In addition, financial leverage, assets structure and firm size have small impacts on ROS and ROA. Also, basing on the findings, SMEs operating in the form of joint stock company have higher business efficiency than those operating in the form of limited liability company.