Firm's Characteristics And Capital Structure - Evidence From Firms In Northern Corridor Economic Region (NCER) Of Malaysia
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Date
2011
Authors
Masron, Tajul Ariffin
Zulkafli, Abdul Hadi
Ibrahim, Haslindar
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Abstract
This study investigates firm characteristic determinants of capital structure which is long term debt of SMEs in the
northern corridor of Economic Region (NCER) in Malaysia. We have conducted the cross-sectional analysis of
15,323 SMES companies for only the year period of year 2007. The research findings of the study provide significant
evidence that the larger the firm, the higher the SMEs to employ the amount of debt than small firms. Conversely,
SMEs with higher profitability significantly to choose to finance less long term in their financing structure decision.
Moreover, we have observed in the data collection, more than half of 15.,323 companies did not choose long term
debt in their financial structure. In addition, the study also found that SMEs are intended to use more long term debts
when the proportion of fixed asset in their companies is increased. The limitations can be addressed here are each
variable is dictated by different measures· used in previous studies which can lead inconsistent results and also the
data period used is very short period.
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Keywords
Small and Medium-sized Enterprises (SME) , Northern Corridor of Economic Region