CAPITAL STRUCTURE DETERMINANTS: MALAYSIAN EVIDENCE

摘要

The present study analyses the capital structure choice of Malaysian firmsfor the period 1993–2003. Debt levels have increased substantially after the 1997East Asian Financial Crisis. Analysis shows that tangibility has no significant influenceon leverage in both pre-crisis and post-crisis periods. This finding contradictsthe findings of earlier studies. Similarly profitability does not appear to have anyinfluence on leverage during both pre-crisis and post-crisis periods. Size has significantnegative influence on leverage in both pre and post-crisis periods. One plausiblereason could be that investors have more information about large companiesand are willing to supply equity to these firms as suggested by information basedtheories of capital structure. Growth as expected has significant negative influenceon leverage in both periods. This is consistent with information based theories ofcapital structure that suggest that growth firms face more uncertainty comparedto stable mature firms and may therefore choose to have less leverage. Tax-basedexplanations of capital structure suggest that presence of Non-Debt Tax Shields(NDTS) obviates the need for leverage. However, analysis shows that NDTS haspositive impact on leverage in both periods thus rendering tax-based explanationsuntenable in the Malaysian context. Liquidity has significant negative influenceduring the pre-crisis period while it has no significant influence during the postcrisisperiod. Volatility has significant influence on leverage though the degreeof influence appears to be small in both periods. Stock price performance hasnegative influence on leverage in both periods indicating possible equity offeringsrather than debt offerings as firms may be timing their equity issues. Thus there issupport for information based explanations of capital structure.