Does Corporate Debt influence the Firms’ Growth after Global Financial Crisis? Evidence from Malaysian Public Listed Companies
This paper aims to investigate the impact of corporate debt on firm growth in Malaysia post Global Financial Crisis 2007-2008. Using a sample of 334 non-financial public listed companies in Bursa Malaysia from 2009 to 2018, this study finds that corporate debt is positively associated with firm grow...
| Main Authors: | , , |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
UiTM Press
2021-06-01
|
| Series: | Journal of International Business, Economics and Entrepreneurship |
| Subjects: | |
| Online Access: | https://myjms.mohe.gov.my/index.php/JIBE/article/view/14444/7466 |
| _version_ | 1797434985433530368 |
|---|---|
| author | Nur Syabihah M.H. Yahya M.H. Meishan Chua |
| author_facet | Nur Syabihah M.H. Yahya M.H. Meishan Chua |
| author_sort | Nur Syabihah M.H. |
| collection | DOAJ |
| description | This paper aims to investigate the impact of corporate debt on firm growth in Malaysia post Global Financial Crisis 2007-2008. Using a sample of 334 non-financial public listed companies in Bursa Malaysia from 2009 to 2018, this study finds that corporate debt is positively associated with firm growth. The possible reasons for this are; 1) the underdeveloped equity market in Malaysia that forced the firms to take up more debt as a financing resource and 2) the highly associated cost of issuing shares caused the firms to choose debt over equity, to finance the firms’ growth. The result is robust using the random effects panel regression model which mitigates unobserved heterogeneity. The finding supports the Pecking Order theory. The practical contribution of the study lies in the need for firms to deliberately design the application of debt in order to mitigate the associated cost of financial distress that arises from debt. |
| first_indexed | 2024-03-09T10:40:46Z |
| format | Article |
| id | doaj.art-87cd1fa6fa464093aa645bb2547a796e |
| institution | Directory Open Access Journal |
| issn | 2550-1429 |
| language | English |
| last_indexed | 2024-03-09T10:40:46Z |
| publishDate | 2021-06-01 |
| publisher | UiTM Press |
| record_format | Article |
| series | Journal of International Business, Economics and Entrepreneurship |
| spelling | doaj.art-87cd1fa6fa464093aa645bb2547a796e2023-12-01T14:29:37ZengUiTM PressJournal of International Business, Economics and Entrepreneurship2550-14292021-06-01619410210.24191/jibe.v6i1.14444Does Corporate Debt influence the Firms’ Growth after Global Financial Crisis? Evidence from Malaysian Public Listed CompaniesNur Syabihah M.H.0Yahya M.H.1Meishan Chua2School of Business and Economics, Universiti Putra Malaysia, MalaysiaSchool of Business and Economics, Universiti Putra Malaysia, MalaysiaFaculty of Business and Management, Universiti Teknologi Mara, Puncak Alam, Selangor, MalaysiaThis paper aims to investigate the impact of corporate debt on firm growth in Malaysia post Global Financial Crisis 2007-2008. Using a sample of 334 non-financial public listed companies in Bursa Malaysia from 2009 to 2018, this study finds that corporate debt is positively associated with firm growth. The possible reasons for this are; 1) the underdeveloped equity market in Malaysia that forced the firms to take up more debt as a financing resource and 2) the highly associated cost of issuing shares caused the firms to choose debt over equity, to finance the firms’ growth. The result is robust using the random effects panel regression model which mitigates unobserved heterogeneity. The finding supports the Pecking Order theory. The practical contribution of the study lies in the need for firms to deliberately design the application of debt in order to mitigate the associated cost of financial distress that arises from debt.https://myjms.mohe.gov.my/index.php/JIBE/article/view/14444/7466corporate debtfirm growthmalaysia |
| spellingShingle | Nur Syabihah M.H. Yahya M.H. Meishan Chua Does Corporate Debt influence the Firms’ Growth after Global Financial Crisis? Evidence from Malaysian Public Listed Companies Journal of International Business, Economics and Entrepreneurship corporate debt firm growth malaysia |
| title | Does Corporate Debt influence the Firms’ Growth after Global Financial Crisis? Evidence from Malaysian Public Listed Companies |
| title_full | Does Corporate Debt influence the Firms’ Growth after Global Financial Crisis? Evidence from Malaysian Public Listed Companies |
| title_fullStr | Does Corporate Debt influence the Firms’ Growth after Global Financial Crisis? Evidence from Malaysian Public Listed Companies |
| title_full_unstemmed | Does Corporate Debt influence the Firms’ Growth after Global Financial Crisis? Evidence from Malaysian Public Listed Companies |
| title_short | Does Corporate Debt influence the Firms’ Growth after Global Financial Crisis? Evidence from Malaysian Public Listed Companies |
| title_sort | does corporate debt influence the firms growth after global financial crisis evidence from malaysian public listed companies |
| topic | corporate debt firm growth malaysia |
| url | https://myjms.mohe.gov.my/index.php/JIBE/article/view/14444/7466 |
| work_keys_str_mv | AT nursyabihahmh doescorporatedebtinfluencethefirmsgrowthafterglobalfinancialcrisisevidencefrommalaysianpubliclistedcompanies AT yahyamh doescorporatedebtinfluencethefirmsgrowthafterglobalfinancialcrisisevidencefrommalaysianpubliclistedcompanies AT meishanchua doescorporatedebtinfluencethefirmsgrowthafterglobalfinancialcrisisevidencefrommalaysianpubliclistedcompanies |