Target capital structure and speed of adjustment: a dynamic evidence from Shariah approved firms in Malaysia

Ramli, Nurshamimitul Ezza and Haron, Razali (2017) Target capital structure and speed of adjustment: a dynamic evidence from Shariah approved firms in Malaysia. Journal of Muamalat and Islamic Finance Research, 14 (2). pp. 65-91. ISSN 1823-075X E-ISSN 0126-5954

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Abstract

The purpose of this paper is to identify the target capital structure and the speed of adjustment of Shariah approved firms listed on the Bursa Malaysia. The paper also examines the influence of firm, industry and macroeconomic determinants affecting the target capital structure. Shariah approved firms which consistently maintain their Shariah status as per the Securities Commission (SC) of Malaysia requirement, from year 2000 to 2014 are chosen as the sample of analysis. The paper employs a dynamic panel data technique specifically the Generalized Method of Moments (GMM) that is robust to the heterogeneity and endogeneity issue. The study found the existence of target capital structure of Shariah approved firms in Malaysia and in terms of speed of adjustment, Shariah approved firms are under-adjusted. Several factors seemed to have significant impact on the target capital structure ranging from the firm, industry and macroeconomic determinants. The study contributes largely in the sampling selection that focuses only on the Shariah approved firms which consistently maintain their Shariah status from the year 2000 to 2014.

Item Type:	Article (Journal)
Additional Information:	4581/63327
Uncontrolled Keywords:	Capital structure, Shariah approved firms, Islamic finance, GMM
Subjects:	H Social Sciences > HB Economic Theory > HB126.4 Islamic Economics 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:	13 Apr 2018 09:24
Last Modified:	13 Apr 2018 09:24
URI:	http://irep.iium.edu.my/id/eprint/63327

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