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International Journal of Economics & Management Sciences

.: Home > International Journal of Economics & Management Sciences > 2011 > Volume 1 Number 3 > Zahariah Sahudin 1 , Wan Mansor Wan Mahmood 2* , Fathiyah Ismail3 , Faridah Pardi4 , Anidah Aziz 5 and Maizatul Akmal Sahudin6

Debt Structure For Malaysian Construction Companies: Evidence From Panel Data Analysis

Zahariah Sahudin 1 , Wan Mansor Wan Mahmood 2* , Fathiyah Ismail3 , Faridah Pardi4 , Anidah Aziz 5 and Maizatul Akmal Sahudin6
1 Faculty of Business and Management, Universiti Teknologi MARA Melaka, Malaysia 2 * Corresponding Author, c/o. Department of Finance and Islamic Banking, Faculty of Business and Management, Terengganu Universiti Teknologi MARA Terengganu, Malaysia, E-mail: dwanmans@tganu.uitm.edu.my 3 Universiti Teknologi MARA Terengganu, Department of Finance and Islamic Banking Faculty of Business and Management, Terengganu 4 Faculty of Business and Management, Melaka, Universiti Teknologi MARA Melaka, Malaysia 5 Faculty of Business and Management, Melaka, Universiti Teknologi MARA Melaka, Malaysia 6 Institut Aminuddin Baki, Ministry of Education, Genting Highland, Malaysia
Abstract :

The main objective of this paper is to examine whether firm’s size, growth opportunity, and firm’s reputation affect the debt level (leverage) of the construction companies in Malaysia. The study uses the data from ten selected Malaysia’s construction companies for the period from 2001 until 2008. Using the panel data technique, the estimation results show that size of construction companies has a strong significant positive relationship to the firm’s leverage. The finding is consistent with the previous findings that firm’s size adds huge information in explaining the level of debt. The results also suggest that company’s leverage is positively affected by firm’s reputation. On the other hand, growth opportunity has inverse relationship with leverage, indicating that high leverage would retard the growth of firms. 

Keywords :
Leverage, Construction companies, Growth opportunity, Size, Malaysia

Date Deposited : 11 Jun 2016 18:53

Last Modified : 11 Jun 2016 18:53

Official URL: http://www.omicsonline.com/

Volume 1, Number 3, March 2011 , ISSN 2162-6359

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