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Determinants of target capital structure: evidence on South East Asia countries under dynamic framework

Haron, Razali and Ibrahim, Khairunisah and Mat Nor, Fauzias and Ibrahim , Izani and Alias, Norazlan (2011) Determinants of target capital structure: evidence on South East Asia countries under dynamic framework. In: Financial Innovation and Transformation in the 21st century, 10-12 June 2011, Langkawi, Malaysia.

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Abstract

The purpose of this study is to identify the existence of target capital structure and to explore the determinants of target capital structure for selected countries in the South East Asia region using the dynamic framework. We also analyze the impact of country specific determinants on the corporate structure decisions within the firms in the countries understudy. We contribute to the existing literature by documenting strong evidence that firms in the selected countries pursue target capital structure. We also conclude that the importance of firm specific determinants varies across countries for firms in the selected countries in the region. The introduction of country specific variables such as the level of stock market development, bond market development, economic growth, interest rates and country governance support and enhance these findings. The importance of country determinants also varies across countries understudy despite sharing some similarities. We also witness cases of inconsistencies regarding the impact of factors on capital structure in the countries under study. To wrap up, we conclude that the capital structure decision is not only the product of the firm’s own characteristics but also the result of institutional environment and corporate governance in which the firm operates.

Item Type: Conference or Workshop Item (Full Paper)
Additional Information: 4581/10521
Uncontrolled Keywords: Capital Structure, determinants, dynamic framework
Subjects: H Social Sciences > HG Finance > HG4001 Financial management. Business finance. Corporation finance.
Kulliyyahs/Centres/Divisions/Institutes: Kulliyyah of Economics and Management Sciences > Department of Finance
Depositing User: Dr. Razali Haron
Date Deposited: 15 Dec 2011 10:57
Last Modified: 15 Dec 2011 10:57
URI: http://irep.iium.edu.my/id/eprint/10521

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