Capital structure inconclusiveness: evidence from Malaysia

Haron, Razali (2013) Capital structure inconclusiveness: evidence from Malaysia. In: Seminar Hasil Penyelidikan Sektor Pengajian Tinggi Kementerian Pendidikan Malaysia, Ke-3 2013, 2 & 3 July 2013, EDC Hotel, Universiti Utara Malaysia, Kedah.

PDF - Published Version Restricted to Registered users only Download (10MB) | Request a copy

Abstract

The objective of this study is to examine the possible factors contributing to the issue of inconclusiveness in capital structure studies. This study also attempts to provide logical explanations to the unresolved issue of inconsistencies in the relationship between factors identified and leverage in capital structure studies. Comparisons are also made between the Malaysia and the developed market to see whether the findings are consistent with both market landscapes. This study employs two models in its methodology which are static and dynamic models to examine the effects of using different models in the study. The Fixed Effect model and Partial Adjustment model represent the static and dynamic models respectively. The dynamic model is estimated using Generalised Method of Moments. This study also uses six definitions of leverage to examine the impact of using different leverage definition in capital structure studies. To test the robustness of the findings comparison were made with past studies done by other researchers on developed markets. This study found that the use of different models (with the same leverage definition) and different leverage definitions (using the same model) give different results including signs. Inconsistencies are more obvious in the different leverage definitions (using the same model) compared to the use of different models (with the same leverage definition). There is also evidence that the findings in Malaysia are consistent with both the emerging and the developed markets as other studies on developed markets also report inconsistent results when using different models and different leverage definitions.

Item Type:	Conference or Workshop Item (Full Paper)
Additional Information:	4581/31138
Uncontrolled Keywords:	capital structure, leverage definitions, static model, partial adjustment model, Malaysia
Subjects:	H Social Sciences > HG Finance > HG4001 Financial management. Business finance. Corporation finance.
Kulliyyahs/Centres/Divisions/Institutes (Can select more than one option. Press CONTROL button):	Kulliyyah of Economics and Management Sciences > Department of Finance
Depositing User:	Dr. Razali Haron
Date Deposited:	22 Aug 2013 14:48
Last Modified:	22 Aug 2013 14:48
URI:	http://irep.iium.edu.my/id/eprint/31138

Actions (login required)

View Item