Abstract
This study intends to examine the impact of selling expense structure on the business growth of 255 Vietnamese large-scale enterprises in three different industries (Consumer Staples, Industrials, and Manufacture) listed on the Vietnamese Stock Exchange over four years from 2015 to 2018. By using STATA software (StataCorp LLC, 4905 Lakeway Drive, College Station, Texas 77845-4512, USA), the research outcomes indicate that both labour expense and depreciation expense have a negative influence on revenue growth and firm size growth but positive influence on profit growth while materials and tools expenses negatively affect all three dependent variables. Furthermore, an increase in the proportion of outsourcing expenses and other selling expenses would result in a significant increase in revenue but a decline in the profit of these companies. From this research results, large-scale enterprises should consider changing the selling expense structure as they spend too much on outsourcing and other selling expenses (60%–70% total selling expense) but too little on labour, which plays an important role in upgrading the profitability of these enterprises.
Highlights
The tension among large economies has caused world trade and investment to decline
A much higher growth level of business profit was seen in Industrials in comparison with others, and Industrial enterprises experienced the fastest growth in profit
A much higher growth level of business profit was seen in Industrials in comparison with other industries, and Industrial enterprises experienced the fastest growth in profit
Summary
The tension among large economies has caused world trade and investment to decline. Enterprises play a significant role in the national economy development, especially contributing decisively to financial recovery and growth (World Bank 2018); business growth is a core element of a healthy national economy, partly contributing to global economic growth. Most previous studies have shown that enterprises have to go through many challenging stages to grow based on two different approaches: the first direction indicates that growth is a natural and necessary element (Henrekson and Johansson 2010; Hermans et al 2015; Stam and Wennberg 2009; Wong et al 2005), while the second direction defines growth as the result of the whole process in which enterprises try to develop and achieve goals (Biesebroeck 2005; Caves 1998; Audretsch and Klepper 2000; Freel and Robson 2004). There are different ways to measure the growth of a business such as comparing revenue between the present year and the previous year (Davidsson et al 2010) basing on industrial characteristics and corporate goals in a manner (Delmar et al 2003; Koga and Kato 2017) or relying on the scale of the business (Hölzl and Friesenbichler 2010; Mansfield 1962; Hart and Oulton 1996; Jones and Miskell 2007)
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