Family Ownership, Firm’s Financial Characteristics and Capital Structure: Evidence from Public Listed Companies in Malaysia

Punitharaja Nadaraja, Abdul Hadi Zulkafli (hadi_zml@usm.my) and Tajul Ariffin Masron
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Punitharaja Nadaraja: School of Management, University Sains Malaysia
Abdul Hadi Zulkafli: School of Management, University Sains Malaysia

Economia. Seria Management, 2011, vol. 14, issue 1, 141-156

Abstract: Capital structure is identified as one of focal facet in corporate finance branch of learning. It provides comprehension on how firms choose to finance their operations and expansion. The objective of this study is to explore the determinants of capital structure of Malaysian public listed companies. The period of 2001-2006 was selected in this study, which reflected the post Asian financial crisis period. Firm’s financial characteristics consist of size, growth, profitability, liquidity and ability to service debt. Family ownership which was identified as a unique feature in the Malaysian corporate sector was used to measure the effect of corporate governance in capital structure decision. Using panel data approach, this study infers that the role of ownership structure in the form of family ownership though is not significantly related to capital structure, its inclusion in the empirical equation changes the significance of other variables. Except for growth, all other financial characteristics have significant relationships with capital structure.

Keywords: Public - Capital Structure; Family Ownership; Corporate Finance; Corporate Governance. (search for similar items in EconPapers)
JEL-codes: G32 G34 (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (5)

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