The Relationship between Ownership Structure, Firm Specific Characteristics and Capital Structure: Evidence from Malaysian Middle-capital Public Listed Firms
This study investigates the relationship between ownership structure and firm specific characteristics with capital structure of Malaysian middle-capital pubic listed firms. Although there are many studies conducted on capital structure, very few examine the connection between ownership concentrati...
| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
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EconJournals
2016-06-01
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| Series: | International Journal of Economics and Financial Issues |
| Online Access: | https://econjournals.com/index.php/ijefi/article/view/2579 |
| _version_ | 1828017527468326912 |
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| author | Hanita Kadir Shahar Azira Abdul Adzis Nureliana Baderi |
| author_facet | Hanita Kadir Shahar Azira Abdul Adzis Nureliana Baderi |
| author_sort | Hanita Kadir Shahar |
| collection | DOAJ |
| description |
This study investigates the relationship between ownership structure and firm specific characteristics with capital structure of Malaysian middle-capital pubic listed firms. Although there are many studies conducted on capital structure, very few examine the connection between ownership concentration and ownership dispersion with capital structure particularly in the Malaysian market. By employing a total of 38 middle-capital firms covering period from 2008 to 2012, the results show that debt level in firms with high ownership concentration is significantly different from firms with low concentration level. It is also found that ownership concentration possess a negative relationship with leverage ratio, the measurement for capital structure. This suggests that debt is less likely to be used as monitoring mechanism in highly concentrated firm. This practice could reduce debt related financial distress cost, which in turn lower agency cost although it promotes agency cost related to managerial opportunistic behaviour. The findings might help investors to understand more about capital structure and help them to judge corporate governance practice of firms based on the level of ownership concentration and choice of capital structure.
Keywords: Ownership Concentration; Ownership dispersion; Capital structure; Malaysia
JEL Classification: G32
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| first_indexed | 2024-04-10T10:50:29Z |
| format | Article |
| id | doaj.art-f94e323e35824cf593d11a42647cb868 |
| institution | Directory Open Access Journal |
| issn | 2146-4138 |
| language | English |
| last_indexed | 2024-04-10T10:50:29Z |
| publishDate | 2016-06-01 |
| publisher | EconJournals |
| record_format | Article |
| series | International Journal of Economics and Financial Issues |
| spelling | doaj.art-f94e323e35824cf593d11a42647cb8682023-02-15T16:20:09ZengEconJournalsInternational Journal of Economics and Financial Issues2146-41382016-06-0163SThe Relationship between Ownership Structure, Firm Specific Characteristics and Capital Structure: Evidence from Malaysian Middle-capital Public Listed FirmsHanita Kadir ShaharAzira Abdul AdzisNureliana Baderi This study investigates the relationship between ownership structure and firm specific characteristics with capital structure of Malaysian middle-capital pubic listed firms. Although there are many studies conducted on capital structure, very few examine the connection between ownership concentration and ownership dispersion with capital structure particularly in the Malaysian market. By employing a total of 38 middle-capital firms covering period from 2008 to 2012, the results show that debt level in firms with high ownership concentration is significantly different from firms with low concentration level. It is also found that ownership concentration possess a negative relationship with leverage ratio, the measurement for capital structure. This suggests that debt is less likely to be used as monitoring mechanism in highly concentrated firm. This practice could reduce debt related financial distress cost, which in turn lower agency cost although it promotes agency cost related to managerial opportunistic behaviour. The findings might help investors to understand more about capital structure and help them to judge corporate governance practice of firms based on the level of ownership concentration and choice of capital structure. Keywords: Ownership Concentration; Ownership dispersion; Capital structure; Malaysia JEL Classification: G32 https://econjournals.com/index.php/ijefi/article/view/2579 |
| spellingShingle | Hanita Kadir Shahar Azira Abdul Adzis Nureliana Baderi The Relationship between Ownership Structure, Firm Specific Characteristics and Capital Structure: Evidence from Malaysian Middle-capital Public Listed Firms International Journal of Economics and Financial Issues |
| title | The Relationship between Ownership Structure, Firm Specific Characteristics and Capital Structure: Evidence from Malaysian Middle-capital Public Listed Firms |
| title_full | The Relationship between Ownership Structure, Firm Specific Characteristics and Capital Structure: Evidence from Malaysian Middle-capital Public Listed Firms |
| title_fullStr | The Relationship between Ownership Structure, Firm Specific Characteristics and Capital Structure: Evidence from Malaysian Middle-capital Public Listed Firms |
| title_full_unstemmed | The Relationship between Ownership Structure, Firm Specific Characteristics and Capital Structure: Evidence from Malaysian Middle-capital Public Listed Firms |
| title_short | The Relationship between Ownership Structure, Firm Specific Characteristics and Capital Structure: Evidence from Malaysian Middle-capital Public Listed Firms |
| title_sort | relationship between ownership structure firm specific characteristics and capital structure evidence from malaysian middle capital public listed firms |
| url | https://econjournals.com/index.php/ijefi/article/view/2579 |
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