DETERMINANTS OF CAPITAL STRUCTURE: AN ANALYSIS OF LISTED FIRMS IN MALAYSIA

Abstract

The purpose of this paper is to examine the major factors affecting capital structure using a dataset of the 50 largest companies in Malaysia. To finance all their business and growth, the companies use a certain combination of debt and equity. In this paper, a panel data analysis of the 50 largest companies listed on Bursa Malaysia is conducted. The data collected covers the period from 2011 to 2021 and analysed using static model which is Fixed Effect Model. This study uses a data analysis technique to analyse and estimate the key determinants of the capital structure of listed companies in Malaysia using data collected by Refinitiv Eikon Datastream. The study was conducted to determine whether the selected factors have a significant relationship with capital structure. The results show that firm size and tangibility have a positive and negative impact on capital structure. Profitability and liquidity are not statistically significant to capital structure. In addition, the researchers are recommended to use more variables and extend the years in the future to obtain better results in determining the capital structure of companies in Malaysia.