Factors influencing the liquidity in Vietnamese listed companies

This study examines the factors that affect liquidity in companies listed on the Vietnam Stock Exchange. The factors are divided into two main groups: those related to corporate governance and other additional factors. To measure a company's liquidity, we use different indicators such as the cash ratio, quick ratio, and cash conversion cycle (CCC). To test the hypotheses and explain how these factors relate to liquidity measures, we develop three econometric models. Our dataset covers the period from 2017 to 2022 and includes companies listed on the HoChiMinh City Stock Exchange. The final sample consists of 359 companies, with 1,638 observations. The results show that in Vietnamese listed companies, both the cash ratio and quick ratio have positive relationships with board size, board independence, and company performance. On the other hand, the net operating cycle is negatively related to board size, company size, board independence, and profitability. This suggests that larger companies with bigger boards and more independent members are better at managing their capital efficiently. However, there is no clear evidence of a relationship between company age and liquidity or between CCC and profitability. These findings provide useful insights into the factors influencing liquidity in Vietnamese listed companies, with important implications for financial management strategies.