The Risk Level of Viet Nam Construction Industry under the Impacts of a Two Factors Model During and after the Global Crisis 2007-2011
Keywords:
asset and equity beta, competitive firm size, Construction industry, market risk, risk management
Abstract
Using a two (2) factors model, this research paper analyzes the impacts of both financial leverage and the size of firms' competitors in the construction industry on the market risk level of 104 listed companies in this category. This paper founds out that the risk dispersion level in this sample study could be minimized in case financial leverage decreases down to 20% and the competitor size doubles (measured by equity beta var of 0,253). Beside, the empirical research findings show us that the risk level could be reduced when financial leverage increases up to 30% and the size of competitor doubles (measured by equity beta value of 0,934). Last but not least, this paper illustrates calculated results that might give proper recommendations to relevant governments and institutions in reevaluating their policies during and after the financial crisis 2007-2011.
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2013-08-26
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