CAPITAL STRUCTURE AND PERFORMANCE OF MANUFACTURING COMPANIES ON BURSA MALAYSIA
DOI:
https://doi.org/10.33736/uraf.6386.2023Keywords:
capital structure, manufacturing companies, MalaysiaAbstract
The study is carried out to examine the impact of capital structure on the performance of Malaysian manufacturing listed corporations. Specifically, the study attempts to investigate the relationship between short-term debt (STD), long-term debt (LTD), total assets (TA) and debt to equity (DE) on the return on equity (ROE) of manufacturing companies listed on Bursa Malaysia. To achieve this objective, the data is collected from the annual data of 30 Malaysian manufacturing companies listed on Bursa Malaysia from 2010 to 2017. The annual reports of the selected companies are available on the Bursa Malaysia webpage. In this study, the data is analyzed using Eviews 9 software. The findings of the study show that total assets (TA) and debt to equity (DE) have negative significant effect on the return on equity (ROE) whereas short-term debt (STD) and long-term debt (LTD) have positive significant relationship with firm financial performance. The study thus contributes towards better understanding on the relationship between the capital structure and performance of the manufacturing companies in Malaysia.
References
Acaravci, S.K. (2015) The Determinants of Capital Structure: Evidence from the Turkish Manufacturing Sector. International Journal of Economics and Financial Issues, 5, 158-171.
Adeniyi, A. J., Marsidi, A., Babatunji, A. S. (2020). Capital Structure and Commercial Banks Performance in Nigeria. International Journal of Academic Research in Accounting, Finance and Management Sciences 10 (1): 239-249.
Aduralere Opeyemi, O. (2019). The Impact of Firm Size on Firms Performance in Nigeria: A Comparative Study of Selected Firms in the Building Industry in Nigeria. Asian Development Policy Review, Asian Economic and Social Society, vol. 7(1), pages 1-11.
Basit, A., & Irwan, N. F. (2017). The Impact of Capital Structure on Firm Performance: Evidence from Malaysia Industrial Sector - A Case based Approach. International Journal of Accounting and Business Management, 5(2), 131-148.
Khanam, F., Nasreen, S., & Pirzada, S. S. (2014). Impact of Capital Structure on Firm's Financial Performance: Evidence from Food Sector of Pakistan. Research Journal of Finance and Accounting, 5(11), 93-107.
Kraus, A and Litzenberger, R. H. (1973). A State-Preference Model of Optimal Financial Leverage. The Journal of Finance. 28 (4). pp. 911-922.
Kuncová, M. & Hedija, V. & Fiala, R (2016). Firm Size as a Determinant of Firm Performance: The Case of Swine Raising,AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 8(3), pages 1-13, September.
Luigi, P. & Sorin, V. (2009) A Review of the Capital Structure Theories. Annals of Faculty of Economics. Vol. 3 (1), pp. 315-320
Miller, M., Modigliani, F., (1958). The Cost of Capital, Corporation Finance, and the Theory of Investment. American Economic Review, pp. 261 – 297.
Modigliani, F., Miller, M. H., (1963). Corporate Income Taxes and the Cost of Capital: A Correction. The AmericanEconomic Review, vol. 53, No. 3, pp. 433 - 443
Nirajini,A & Priya,K. B. ((2013). Impact of Capital Structure on Financial Performance of the Listed Trading Companies in Sri Lanka. International Journal of Scientific and Research Publications, Volume 3, Issue 5.
Pei Sze, N. and Marsidi A. (2022). Social disclosure and governance among malaysian corporations. International Journal of Business and Society, 23(3), 1888-1907.
Raza, M. W. (2013). Affect of financial leverage on firm performance. Empirical evidence from Karachi Stock Exchange. 1-20.
San, D. T. (2011). Capital Structure and Corporate Performance of Malaysia Construction Sector. International Journal of Humanities and Social Science, 1(2), 28-34.
Zeitun, R., & Tian, G. (2007). Capital Structure and Corporate Performance: Evidence from
Jordan. Australasian Accounting, Business and Finance Journal, 1(4), 1-24.
Downloads
Published
How to Cite
Issue
Section
License
Copyright Transfer Statement for Journal
1) In signing this statement, the author(s) grant UNIMAS Publisher an exclusive license to publish their original research papers. The author(s) also grant UNIMAS Publisher permission to reproduce, recreate, translate, extract or summarize, and to distribute and display in any forms, formats, and media. The author(s) can reuse their papers in their future printed work without first requiring permission from UNIMAS Publisher, provided that the author(s) acknowledge and reference publication in the Journal.
2) For open access articles, the author(s) agree that their articles published under UNIMAS Publisher are distributed under the terms of the CC-BY-NC-SA (Creative Commons Attribution-Non Commercial-Share Alike 4.0 International License) which permits unrestricted use, distribution, and reproduction in any medium, for non-commercial purposes, provided the original work of the author(s) is properly cited.
3) For subscription articles, the author(s) agree that UNIMAS Publisher holds copyright, or an exclusive license to publish. Readers or users may view, download, print, and copy the content, for academic purposes, subject to the following conditions of use: (a) any reuse of materials is subject to permission from UNIMAS Publisher; (b) archived materials may only be used for academic research; (c) archived materials may not be used for commercial purposes, which include but not limited to monetary compensation by means of sale, resale, license, transfer of copyright, loan, etc.; and (d) archived materials may not be re-published in any part, either in print or online.
4) The author(s) is/are responsible to ensure his or her or their submitted work is original and does not infringe any existing copyright, trademark, patent, statutory right, or propriety right of others. Corresponding author(s) has (have) obtained permission from all co-authors prior to submission to the journal. Upon submission of the manuscript, the author(s) agree that no similar work has been or will be submitted or published elsewhere in any language. If submitted manuscript includes materials from others, the authors have obtained the permission from the copyright owners.
5) In signing this statement, the author(s) declare(s) that the researches in which they have conducted are in compliance with the current laws of the respective country and UNIMAS Journal Publication Ethics Policy. Any experimentation or research involving human or the use of animal samples must obtain approval from Human or Animal Ethics Committee in their respective institutions. The author(s) agree and understand that UNIMAS Publisher is not responsible for any compensational claims or failure caused by the author(s) in fulfilling the above-mentioned requirements. The author(s) must accept the responsibility for releasing their materials upon request by Chief Editor or UNIMAS Publisher.
6) The author(s) should have participated sufficiently in the work and ensured the appropriateness of the content of the article. The author(s) should also agree that he or she has no commercial attachments (e.g. patent or license arrangement, equity interest, consultancies, etc.) that might pose any conflict of interest with the submitted manuscript. The author(s) also agree to make any relevant materials and data available upon request by the editor or UNIMAS Publisher.
