Modelling debt financing behaviour of Malaysia SMEs

Haron, Razali (2015) Modelling debt financing behaviour of Malaysia SMEs. In: 2nd International Symposium on Technology Management & Emerging Technologies (ISMET 2015), 25th-27th August 2015, Langkawi Malaysia.

	PDF - Published Version Restricted to Repository staff only Download (1MB) | Request a copy
Preview	PDF (scopus) Download (250kB) | Preview

Abstract

This study models the debt financing behaviour of SMEs (Enterprise 50) in Malaysia to determine the existence of target debt, speed of adjustment and rational financing by utilizing panel data from 2009-2013. The estimated debt financing model revealed certain factors such as profitability, tangibility,business risk, growth, size, liquidity and share price performance significantly influence target debt financing. The study found that 52% of the SMEs examined adjust their financing rationally. Further investigation revealed that under-levered SMEs adjust relatively faster to be at target debt relative to the over-levered counterparts. SMEs that are practicing rational financing behaviour would either reduce or increase their debt intake to reach to their target debt level. This study contributes to the literature and fills the gap by enhancing the understanding of debt financing of SMEs in Malaysia.

Item Type:	Conference or Workshop Item (Invited Papers)
Additional Information:	4581/44532
Uncontrolled Keywords:	target debt; speed of adjustment; rational financing; SME
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):	Institute of Islamic Banking & Finance (IIiBF)
Depositing User:	Dr. Razali Haron
Date Deposited:	08 Sep 2015 10:11
Last Modified:	19 Sep 2017 12:38
URI:	http://irep.iium.edu.my/id/eprint/44532

Actions (login required)

View Item