SELECTING DIFFERENT INDUSTRIAL COMPETITORS INFLUENCE THE RISK LEVEL OF VIETNAM TELECOMMUNICATION AND EDUCATION COMPANIES

Huy Dinh

Romanian Economic Business Review, 2013, vol. 8, issue 4, 72-83

Abstract: This research shows marketing factors such as business competitors could affect business market risk, from a quantitative point of view. Using a two (2) factors model, this research paper estimates the impacts of not only the size of firms’ competitors, but also leverage in the telecommunication and education industry, on the market risk of 18 listed companies in this category. This paper founds out that the risk dispersion level in this sample study could be minimized in case the competitor size is approximately the same (measured by equity beta var of 0,283) and leverage down to 20%. Beside, the emprical research findings show us that when financial leverage increases up to 30%, max asset beta value decreases from 0,393 to 0,386 in case the size of competitor doubles or slightly smaller. Last but not least, this paper illustrates calculated results that might give proper recommendations to relevant governments and institutions in re-evaluating their policies during and after the financial crisis 2007-2011.

Keywords: risk management; competitive firm size; market risk; asset and equity beta; education and telecommunication industry (search for similar items in EconPapers)
Date: 2013
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