The Factors Influencing The Stock Prices of Construction Industry Enterprises: An Empirical Study in Vietnam

Abstract

Purpose: The construction sector is essential for the economic development of a country. This industry is likewise a key player and has a significant influence on the stock market. Hence, it is necessary to analyze the variables that influence the stock prices in the construction sector, as this will enable investors to maximize profits and mitigate risks. Theoretical framework: This study evaluates the impact of macro factors and internal factors on the stock prices of the construction industry. Design/Methodology/Approach: This study utilizes quarterly financial reports from 56 construction industry enterprises in the Vietnamese stock market during the period from 2016 to 2022 to examine the factors affecting the stock prices of this sector. Findings: The results of the analysis indicate that the Random Effects Model (REM) is the most appropriate model, with factors such as the Consumer Price Index (CPI), Earnings Per Share (EPS), firm size (SIZE), and Price-Earnings ratio (PE) all having a positive impact on the stock prices of the construction industry. Research, Practical & Social implications: Based on these findings, the article provides recommendations for investors and relevant industry stakeholders. Originality/value: This article has conducted extensive analyses of factors influencing the stock prices of construction industry enterprises. The authors also provide suggestions for investors and relevant industry stakeholders to make investment decisions.