Capital Structure and Firm Performance: Evidence from Malaysian Public Listed Plantation Companies

This paper examines the relationship between capital structure and performance of firms. The study is confined to plantation sector companies in Malaysia and is based on a sample of 39 firms which listed in Bursa Malaysia for the period from 2009 to 2019. This study uses two performance measures which are ROA and ROE as the dependent variable. Besides, the capital structure measures are the short-term debt, long-term debt, total debt and firm growth, which as the independent variables. Size will be the control variable in this study. Moreover, a fixed-effect panel regression analysis has been used to analyse the impact of capital structure on firm performance. The results indicate that firm performance, which is in term of ROA, have an insignificant relationship with short-term debt (STD) and long-term debt (LTD). For the total debt (TD) and growth, there is a significant relationship with ROA. However, for the performance measured by ROE, it has an insignificant relationship with short-term debt (STD), long-term debt (LTD) and total debt (TD). Furthermore, there is a significant relationship between the growth and the performance firms from plantation sector in Malaysia.

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Debt Financing and Firm Performance: Evidence from an Emerging South-Asian Country

Business and Economic Research ◽

10.5296/ber.v10i1.15910 ◽

2019 ◽

Vol 10 (1) ◽

pp. 40

Author(s):

Mohammad Mazibar Rahman ◽

Umme Khadija Kakuli ◽

Shahnaz Parvin ◽

Ayrin Sultana

Keyword(s):

Firm Performance ◽

Capital Structure ◽

Financial Performance ◽

Negative Influence ◽

Short Term ◽

Return On Assets ◽

Return On Equity ◽

Firm Financial Performance ◽

Total Debt

This paper aims to empirically investigate the impact of capital structure choice on the firm performance of the firms listed under the Dhaka Stock Exchange of Bangladesh. Multiple regression has been employed in this research to determine the relationship between the capital structure and the firm’s financial performance. Three ratios of financial performance, i.e., return on assets, return on equity, and gross margin, have been used as a sample of non-financial Bangladeshi companies, selected from 2010 to 2015. The study records numerous findings. First, the result shows a significant negative influence of long-term debt (LTD) and total debt (TTD) on firm financial performance measured by return on assets (ROA), but no significant relationship is found between short-term debt (STD) and this measure of firm’s financial performance. Moreover, the research found that there is no significant effect of short-term debt, long-term debt and total debt on the firm financial performance measured by return on equity (ROE). Finally, the result shows that a significant negative influence of short-term debt and total debt on firm performance measured by GM, but no significant relationship was found between long-term debt and financial performance. In general terms, the results of this study may suggest that capital structure has a negative influence on firms’ financial performance in Bangladesh.

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Impact of Capital Structure on Firm’s Performance: Focusing on Non-financial Listed Egyptian Firms

International Journal of Financial Research ◽

10.5430/ijfr.v10n6p78 ◽

2019 ◽

Vol 10 (6) ◽

pp. 78 ◽

Cited By ~ 1

Author(s):

Ahmed Sakr ◽

Amina Bedeir

Keyword(s):

Capital Structure ◽

Negative Impact ◽

Short Term ◽

Total Debt ◽

Significant Negative Impact ◽

Two Measures ◽

Independent Variable ◽

Measure Of Performance ◽

The Impact

The purpose of this paper is to investigate the impact of capital structure decisions on the performance of the firm. The investigation has been performed using a data of 62 listed non-financial Egyptian firms over a period of fourteen years from 2003-2016. This study used two measures for performance the dependent variable which are ROA and ROE, the most common used measures agreed upon on the majority of previous studies. Whereas, for the independent variable “the capital structure, the study uses the three measures of capital structure which are total debt to total assets (TD), total short-term debt to total assets (STD), and total long-term debt to total assets (LTD). The results showed when using ROA as a measure of performance, a significant negative impact of capital structure (TD, STD, and LTD) exists; while in case of using ROE as a measure of performance, there’s a significant negative impact of capital structure only when using STD, otherwise a positive significant impact of capital structure exist.

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The Impact of Different Firm Sizes on Capital Structure Determinants Among Listed Consumer Product Firms In Malaysia

Journal of Economic Info ◽

10.31580/jei.v5i2.104 ◽

2018 ◽

Vol 5 (2) ◽

pp. 1-6

Author(s):

Hishan S Sanil ◽

Ahmad Amirul Arsyad bin Noraidi ◽

Suresh Ramakrishnan

Keyword(s):

Capital Structure ◽

Annual Report ◽

Fixed Effect ◽

Consumer Product ◽

Short Term ◽

Effect Analysis ◽

Total Debt ◽

The Impact ◽

The Relationship

This research is conducted to determine the impact of different firm sizes on the relationship between capital structure determinants and leverage among listed consumer product firms in Malaysia from year 2006 to 2015. All data was taken from annual report of the companies by using DataStream. In 2015, 130 firms were listed in Bursa Malaysia under the consumer product sector. However, only 108 firms were observed as several firms had insufficient data. This study uses the dependent variable of debt ratios i.e. short-term debt, long-term debt and total debt. The independent variables used are firm size, profitability, tangibility, liquidity, growth, non-tax debt shield and business risk. Those results were obtained by applying Pooled OLS and Fixed Effect Analysis. The main finding of this study is that different firm sizes will affect the relationship between capital structure determinants and leverage. The Fixed Effect analysis revealed that all determinants were significant across all types firm sizes. Furthermore, non-tax debt shield had the largest impact to all types of leverage across different firm sizes.

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Influence of Debt Maturity on Firm Performance: An International Comparison

International Journal of Economics and Finance ◽

10.5539/ijef.v9n5p106 ◽

2017 ◽

Vol 9 (5) ◽

pp. 106

Author(s):

Ben Said Hatem

Keyword(s):

Firm Performance ◽

Capital Structure ◽

International Comparison ◽

Debt Maturity ◽

Debt Ratio ◽

Short Term ◽

Total Debt ◽

Negative Effect ◽

Positive Effect

This paper manipulate the effect of capital structure maturity on firm performance. Debt maturity is measured by three ratios (the long term capital structure, the short term capital structure and total debt ratio). We test a sample consisting of 116 firms from Malaysia and 92 firms from Mexico over a period of 7 years from 2005 to 2011. We could not find evidence on the effect of the long term debt ratio on firm performance. However, firms with higher short term capital structure ratio, are less profitable. This result is valid for firms from Malaysia and Mexico. The results of total debt ratio rare mixed. We conclude to a positive effect for firms of Malaysia and a negative effect for firms of Mexico.

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FAKTOR-FAKTOR PENENTU STRUKTUR MODAL PERUSAHAAN NON KEUANGAN YANG TERDAFTAR DI BURSA EFEK INDONESIA

Jurnal Manajemen dan Pemasaran Jasa ◽

10.25105/jmpj.v7i2.809 ◽

2014 ◽

Vol 7 (2) ◽

pp. 273

Author(s):

Wulansari Dewi ◽

Henny Setyo Lestari

Keyword(s):

Capital Structure ◽

Hypothesis Testing ◽

Firm Growth ◽

Sampling Method ◽

Stock Exchange ◽

Debt Ratio ◽

Short Term ◽

Total Debt ◽

Size Firm

This research discusses whether there are effect of capital structure on leverage. Independent variable consist of firm size, firm growth, tangibility of assets, profitability, and risk. Dependent variable divided into 3 indicators such as total debt ratio, long term debt ratio, and short term debt ratio. The study consisted of 164 nonfinancial industries, which was obtained from official website of Indonesia Stock Exchange (http://www.idx.co.id). The sampling method used in this study was purposive sampling and data analysis method used for hypothesis testing is linear regression analysis. The results of hypothesis testing showed that there is influence between capital structure on total debt ratio and short term debt ratio. But not too significantly to long term debt ratio. The contribution of this study hopefully can help managers and investors alike to make a right decision in nonfinancial industry in Indonesia. Keywords: capital structure, growth, long term debt ratio, risk, ROA, short term debtratio, size, tangibility of assets, total debt ratio.

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The impact of dividend policy on firm performance: A case study of the industrial sector

Risk Governance and Control Financial Markets & Institutions ◽

10.22495/rgcv9i3p2 ◽

2019 ◽

Vol 9 (3) ◽

pp. 23-31

Author(s):

Khan Kamran ◽

Houda Chakir Chakir Lamrani ◽

Shah Khalid

Keyword(s):

Firm Performance ◽

Capital Structure ◽

Firm Size ◽

Stock Price ◽

Firm Growth ◽

Dividend Policy ◽

Industrial Sector ◽

Dividend Payment ◽

The Impact

A dividend is a part of the profit that is distributed among the shareholders. When there is more profit, it increases the dividends which, in turn, increase the stock price of the firm and vice versa, when there is less profit it decreases the dividend payment and the stock price. In Pakistan the companies have no standard policy, therefore, they are open to decide about the dividend payment. The main objectives of the research are aimed at analyzing and investigating factors which affect firm performance such as dividend policy, capital structure short and long term, firm size and firm growth. In this research, the effect of dividend payment policy on the firm’s future performance of the Karachi stock exchange (KSE) listed companies (specifically cement sector) is analyzed. For this purpose, 5 hypotheses are developed and tested. The analyses are carried out by the econometric model (linear regression). The result shows that dividend policy, capital structure long term and firm size influence the performance of the firm (ROE).

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Struktur Modal dan Kinerja Perusahaan (Studi pada perusahaan yang terdaftar di Bursa Efek Indonesia periode 2011 s/d 2012)

JURNAL RISET AKUNTANSI DAN AUDITING "GOODWILL" ◽

10.35800/jjs.v5i1.4928 ◽

2014 ◽

Vol 5 (1) ◽

Author(s):

Novi S Budiarso

Keyword(s):

Firm Performance ◽

Capital Structure ◽

Firm Value ◽

Stock Exchange ◽

Optimal Level ◽

Stock Exchanges ◽

Listed Firms ◽

Total Debt ◽

The Impact

Abstract This paper examine the impact of capital structure on firm performance, in Indonesian Stock Exchange. Firm performance are analyzed from the side of accounting indicators, in this research use liquidity. Because the optimal level of debt of the firm is limited by the liquidity of the assets and it depends on the average usage of the debt in the particular industry. In the other side liquidity is conventionally seen as reflecting investors’ degree of risk -aversion, The study collects of listed firms in Indonesian Stock Exchanges during 2011 to 2012. The listed firms on sub sector trade, services and investment. Multiple Regression analysis approach was employed in carrying out this analysis. Specifically, determined the simultaneous relationships among the various variables. The results show that as partial total debt to asset significantly influences to company’s performance but long term debt to asset not significantly influences to company’s performance. Simultaneously, total debt to asset and long term debt to asset influences company’s performance. This evidence is consistent with models of optimal capital structure and with the hypothesis that debt level changes release information about changes in firm value/performance.

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Exploring the Road to Agricultural Sustainability by Assessing the EU Debt Influencing Factors

Sustainability ◽

10.3390/su10072465 ◽

2018 ◽

Vol 10 (7) ◽

pp. 2465

Author(s):

Laura Brad ◽

Gabriel Popescu ◽

Alina Zaharia ◽

Maria Claudia Diaconeasa ◽

Daniela Mihai

Keyword(s):

Poverty Reduction ◽

Fixed Costs ◽

The European Union ◽

Labor Costs ◽

Short Term ◽

Total Debt ◽

Long Run ◽

Periodic Analysis ◽

The Impact

The importance of agricultural financing in ensuring food security and safety, jobs, poverty reduction, economic growth and more recently, climate change mitigation, natural resource conservation and sustainable development imposes periodic analysis of the factors which might influence the farmers’ financial situation, in order to improve it. One way of assessing this is to analyze the agricultural debt. In this context, based on previous models, the paper aims to assess the impact of specific factors on the agricultural debt level in the European Union during 2008–2015, as these should be considered in future common agriculture policies as well as in achieving sustainable agriculture. The research was conducted based on econometric techniques, by applying panel models in the Eviews 7.0 software-64 bit version. More than 20 variables were considered in the analysis. Some of the findings suggest that an increase in subsidies as well as the share of cash flow in the total existing capital would determine considerable reductions of the total debt. Decoupled subsidies seem to have a higher impact than coupled subsidies on short term debt, while its value is between the one found for coupled subsidies in the case of long term debt. Large farms/companies, to which decoupled payments are granted, have higher debts on long run and on total debt. The same units, to which coupled subsidies were granted, have smaller short-term debt. In contrast, the increases of labor costs, fixed costs, and crop/livestock costs lead to an increase in the total debt, since the farms require additional financial resources to cover the expanded costs. Also, the results suggest that short-term debts are mainly formed of long-term loans that reached maturity. In this case, the authors support the idea of differentiated financing programs for the agricultural activities because of their peculiarities and reinforced by the need to turn the intensive agriculture into a sustainable and plentiful one.

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Influence of Capital Structure on Corporate Performance of Listed Firm in PSX: Role of External Factors

Journal of Accounting and Finance in Emerging Economies ◽

10.26710/jafee.v7i3.1944 ◽

2021 ◽

Vol 7 (3) ◽

Author(s):

Abdul Hameed ◽

Farheen Zahra Hussain ◽

Khawar Naheed ◽

Muhammad Sadiq Shahid

Keyword(s):

Firm Performance ◽

Capital Structure ◽

Debt Financing ◽

External Factors ◽

Least Square ◽

Total Debt ◽

Integral Role ◽

Equity Ratio ◽

The Impact

Purpose: A company’s capital structure is a blend of its equity and debt financing and is considered a significant factor in the valuation of any firm. The decisions related to capital structure formation play an integral role for the firms, therefore; this research tends to explore the factors of capital structure and their impact on firm performance. For this purpose, financial data for different listed companies in PSX has been gathered, and dividends and taxes are used as firm external factors. Design/Methodology/Approach: To examine the impact, the panel data has been used for the period 2016-2020 and panel least square has been applied. Findings: The findings suggest that among the variables current ratio, dividends, taxation, total debt to total equity ratio, and the firm size are statistically significant to profitability. The study also concludes that dividends and tax have a greater impact on capital structure and firm performance. Implications/Originality/Value: Managers and owners of the firms must make sure that their profits are used for future investments rather than payment of debts to avoid bankruptcy.

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The Impact of Liquidity on the Capital Structure: Evidence from Malaysia

International Journal of Economics and Finance ◽

10.5539/ijef.v8n10p130 ◽

2016 ◽

Vol 8 (10) ◽

pp. 130 ◽

Cited By ~ 4

Author(s):

Maziar Ghasemi ◽

Nazrul Hisyam Ab Razak

Keyword(s):

Capital Structure ◽

Short Term ◽

Current Ratio ◽

Debt Level ◽

Asset Liquidity ◽

Independent Variable ◽

The Impact ◽

A Company ◽

The Capital Structure

For many years, liquidity of a company’s asset and its effect on the optimal debt level has been a controversial issue among scholars in finance studies. Prior studies have demonstrated that in some countries, asset liquidity increased debt level while in other countries liquid companies were less leveraged and more regularly financed by their own capital. This study investigates the effect of liquidity on the capital structure among the 300 listed companies in the Main market of Bursa Malaysia from 2005 to 2013 fiscal years. Pooled OLS is applied to investigate the impact of liquidity ratios on different Debt ratios. Liquidity of a company, which is the independent variable of this study, is measured by two common ratios which are: quick ratio and current ratio. Additionally, the Debt/Equity and Debt/Asset ratios represent the capital structures based on the short-term, long-term and total debt. The results show that all the measures of liquidity have significant impacts on all the proxies of leverage. According to the results, Quick ratio has a positive effect on leverage; although, Current ratio is negatively related to leverage. Moreover, short-term debt is more influenced by liquidity compared to long-term debt.

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