The determinants of capital structure: an empirical investigation of Malaysian listed government linked companies

Siti Nur Aqilah Ab Wahab and Nur Ainna Ramli (2014) The determinants of capital structure: an empirical investigation of Malaysian listed government linked companies. International Journal of Economics and Financial Issues, 4 (4). pp. 930-945. ISSN 2146-4138

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Abstract

In this study, we explore how the debt equity choices of Listed Malaysian Government linked Companies (GLCs) are influenced by the firm specific characteristics and macroeconomic variables using a sample of 13 GLCs from 1997 to 2009. Two elements of leverage, book value of total debt ratio (BVTDR) and long term debt ratio (BVLTDR), were used to check for any significant changes in corporate financing and found mixed results. Tangibility and firm size are the most significant variables to determine the corporate financing of GLCs. Liquidity and interest rate are negatively significant with BVTDR and BVLTDR, respectively.The study concluded that profitability is inconsequential in determining corporate financing; inconsistent with the findings of previous Malaysian studies. With the proper design of capital structure and intervention from the government, the study also concludes that GLCs are rely less on leverage to support their investment activities.

Item Type: Article
Keyword: Capital Structure , Pecking Order Theory , Trade-off Theory
Subjects: H Social Sciences > HB Economic theory. Demography
H Social Sciences > HG Finance
Department: FACULTY > Labuan Faculty of International Finance
Depositing User: SAFRUDIN BIN DARUN -
Date Deposited: 07 Jul 2021 15:14
Last Modified: 07 Jul 2021 15:14
URI: https://eprints.ums.edu.my/id/eprint/27889

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