The determinants of capital structure on government linked companies in Malaysia

• Main Author: Nurul Najwa, Abdul Razak
• Format: Thesis
• Language: English; English
• Published: 2021
• Subjects: HG Finance; HJ Public Finance
• Online Access: https://etd.uum.edu.my/10362/1/grant%20the%20permission_s826948.pdf; https://etd.uum.edu.my/10362/2/s826948_01.pdf; https://etd.uum.edu.my/10362/

The study of capital structure seeks to interpret the mix of securities and financing sources utilized by corporations to finance real investment. At this case, firms must select the best financing sources to attain the optimal capital structure to be in harmony which in line with firm’s requirements in order to take appropriate financing decision. Government-linked companies play a significant role in the economic development of Malaysia. The objective of this study is to explore the determinants of capital structure of 30 government-linked companies (GLCs) listed on Bursa Malaysia Stock Exchange from 2016 to 2020. This research project uses capital structure measure including firm size, liquidity, profitability and tangibility as independent variable. Debt ratio is the dependent variable. The firm’s capital structure was analysed by using secondary data gathered from the firm’s annual report. Panel data approach was applied to test the hypothesized relationship and the result indicated that firm size, profitability and tangibility have significant positive relationship with debt ratio. This study also finds that there is insignificant negative association between liquidity. This study covers the way for future research related to ownership and capital structure of Malaysian GLCs.