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Determinants of debt structure in ACE Market Bursa Malaysia: a panel data analysis

This study was conducted with the aim to examine the relevance of different financing theories namely Agency Theory, Trade-Off Theory and Pecking Order Theory to explain capital structure choices among firms in "Access, Certainty, Efficiency" (ACE) Market of Bursa Malaysia. The ACE Market...

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Main Authors: Ghasemi, Maziar, Ab Razak, Nazrul Hisyam, Dehghani, Komeil
Format: Article
Language:English
Published: Academic Research Publishing Group 2018
Online Access:http://psasir.upm.edu.my/id/eprint/72209/1/Determinants%20of%20debt%20structure%20in%20ACE%20Market%20Bursa%20Malaysia.pdf
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spelling oai:psasir.upm.edu.my:72209 http://psasir.upm.edu.my/id/eprint/72209/ Determinants of debt structure in ACE Market Bursa Malaysia: a panel data analysis Ghasemi, Maziar Ab Razak, Nazrul Hisyam Dehghani, Komeil This study was conducted with the aim to examine the relevance of different financing theories namely Agency Theory, Trade-Off Theory and Pecking Order Theory to explain capital structure choices among firms in "Access, Certainty, Efficiency" (ACE) Market of Bursa Malaysia. The ACE Market is the financing source for the high-growth and technology requirements of middle-sized firms. The literature on debt policy decision making in the ACE market have been scant, leading the scholars to realize the necessity of performing more studies in this field. To further explain this issue, this study performed a quantitative analysis on a panel data sample of 60 ACE firms from 2005 to 2016. Three proxies for leverage namely total, long-term and short-term debts were examined based on the total assets and equity in six regression models. From seven variables examined in this study, findings indicated a significant relationship between warrant and debt in all models. In addition, liquidity, firm size, profitability and leverage showed significant relationship in all the models except for long-term debt. However, reputation, non-debt tax shield and interest tax shield were seen significant in some models. Trade-off Theory and Pecking Order Theory can jointly clarify determinants of firms’ capital structure in the ACE Market. Academic Research Publishing Group 2018 Article PeerReviewed text en http://psasir.upm.edu.my/id/eprint/72209/1/Determinants%20of%20debt%20structure%20in%20ACE%20Market%20Bursa%20Malaysia.pdf Ghasemi, Maziar and Ab Razak, Nazrul Hisyam and Dehghani, Komeil (2018) Determinants of debt structure in ACE Market Bursa Malaysia: a panel data analysis. Journal of Social Sciences Research, spec. 6. 390 - 395. ISSN 2413-6670; ESSN: 2411-9458 (In Press) https://arpgweb.com/search
institution UPM IR
collection UPM IR
language English
description This study was conducted with the aim to examine the relevance of different financing theories namely Agency Theory, Trade-Off Theory and Pecking Order Theory to explain capital structure choices among firms in "Access, Certainty, Efficiency" (ACE) Market of Bursa Malaysia. The ACE Market is the financing source for the high-growth and technology requirements of middle-sized firms. The literature on debt policy decision making in the ACE market have been scant, leading the scholars to realize the necessity of performing more studies in this field. To further explain this issue, this study performed a quantitative analysis on a panel data sample of 60 ACE firms from 2005 to 2016. Three proxies for leverage namely total, long-term and short-term debts were examined based on the total assets and equity in six regression models. From seven variables examined in this study, findings indicated a significant relationship between warrant and debt in all models. In addition, liquidity, firm size, profitability and leverage showed significant relationship in all the models except for long-term debt. However, reputation, non-debt tax shield and interest tax shield were seen significant in some models. Trade-off Theory and Pecking Order Theory can jointly clarify determinants of firms’ capital structure in the ACE Market.
format Article
author Ghasemi, Maziar
Ab Razak, Nazrul Hisyam
Dehghani, Komeil
spellingShingle Ghasemi, Maziar
Ab Razak, Nazrul Hisyam
Dehghani, Komeil
Determinants of debt structure in ACE Market Bursa Malaysia: a panel data analysis
author_facet Ghasemi, Maziar
Ab Razak, Nazrul Hisyam
Dehghani, Komeil
author_sort Ghasemi, Maziar
title Determinants of debt structure in ACE Market Bursa Malaysia: a panel data analysis
title_short Determinants of debt structure in ACE Market Bursa Malaysia: a panel data analysis
title_full Determinants of debt structure in ACE Market Bursa Malaysia: a panel data analysis
title_fullStr Determinants of debt structure in ACE Market Bursa Malaysia: a panel data analysis
title_full_unstemmed Determinants of debt structure in ACE Market Bursa Malaysia: a panel data analysis
title_sort determinants of debt structure in ace market bursa malaysia: a panel data analysis
publisher Academic Research Publishing Group
publishDate 2018
url http://psasir.upm.edu.my/id/eprint/72209/1/Determinants%20of%20debt%20structure%20in%20ACE%20Market%20Bursa%20Malaysia.pdf
_version_ 1819299020383715328
score 13.4562235

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