Abstract
This study analyzes the impact of the cost of capital on long-term investment decisions of 40 FDI enterprises in Vietnam during the period of 2017-2024, with a total of 320 observations. Data was collected from audited financial statements. The GLS regression results indicate that the cost of capital, including the cost of debt, cost of equity, weighted average cost of capital, as well as financial leverage, has a negative impact on long-term investment decisions, as the resulting financial pressure makes firms more cautious when selecting projects. In contrast, firm size, age, and revenue growth rate have positive effects, implying that larger, more experienced, and high-growth-potential enterprises are more likely to prioritize investment expansion to strengthen their competitiveness. The findings provide additional empirical evidence from the specific context of the Vietnamese market, where FDI enterprises face exchange rate volatility and capital market challenges. This research offers the foundation for managing capital costs and planning effective long-term investment strategies, while also proposing supportive policies to create a stable financial environment that fosters the sustainable development of FDI enterprises in Vietnam.
Keywords: cost of capital, long-term investment decision, FDI enterprises, Vietnam.
JEL classification:D24, D92, E22, F21.
DOI: 10.63767/TCKT.35.2025.104.112
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Ban biên tập Tạp chí Kinh tế & Quản trị Kinh doanh
Phòng 514, Nhà điều hành, trường Đại học Kinh tế & Quản trị Kinh doanh
Địa chỉ: Phường Tân Thịnh, thành phố Thái Nguyên
Email: tapchikt-qtkd@tueba.edu.vn; Điện thoại: 0208.3903373
