The mediation effects of capital structure: Evidence from Malaysian and Indonesian economic sectors
We study the comprehensive, simultaneous interrelationships between countries, economic sectors (i.e., primary, secondary, and tertiary sector), capital structure and firm financial performance, especially involving the mediation effects in different sectors. We find that some determinants of capita...
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| Format: | Article |
| Language: | English English |
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Auricle Technologies
2022
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| Online Access: | https://eprints.ums.edu.my/id/eprint/34156/1/FULL%20TEXT.pdf https://eprints.ums.edu.my/id/eprint/34156/2/ABSTRACT.pdf |
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| author | Nur Ainna Ramli Gilbert Nartea Ahmad Fadly Nurullah Rasedee Aslina Baharum |
| author_facet | Nur Ainna Ramli Gilbert Nartea Ahmad Fadly Nurullah Rasedee Aslina Baharum |
| author_sort | Nur Ainna Ramli |
| collection | UMS |
| description | We study the comprehensive, simultaneous interrelationships between countries, economic sectors (i.e., primary, secondary, and tertiary sector), capital structure and firm financial performance, especially involving the mediation effects in different sectors. We find that some determinants of capital structure do not only directly enhance firm financial performance. Firm financial performance is also influenced by how capital structure from the product category in the economic sectors have been financed. We find a significant relationship between capital structure and firm financial performance in the secondary and tertiary sectors but not for the primary sector. We find that the secondary sector tends to use internal financing while the tertiary sector tends to use external financing to enhance firm financial performance. Our results also reveal that the effect of capital structure on firm financial performance tends to be mediated by firm- and country specific attributes, as well as by the sector in which they operate. A closer examination of the data showed that in the economic sectors, we find robust results that there are not just positive direct and indirect effects, but also negative direct and indirect effects. It should be well understood by financial managers that secondary and tertiary sectors plays an important role in the mediation effect. The contribution of this study is to help the firm manager to make a good decision on the proportions of their capital structure. |
| first_indexed | 2024-03-06T03:20:12Z |
| format | Article |
| id | ums.eprints-34156 |
| institution | Universiti Malaysia Sabah |
| language | English English |
| last_indexed | 2024-03-06T03:20:12Z |
| publishDate | 2022 |
| publisher | Auricle Technologies |
| record_format | dspace |
| spelling | ums.eprints-341562022-09-27T02:24:37Z https://eprints.ums.edu.my/id/eprint/34156/ The mediation effects of capital structure: Evidence from Malaysian and Indonesian economic sectors Nur Ainna Ramli Gilbert Nartea Ahmad Fadly Nurullah Rasedee Aslina Baharum HB1-3840 Economic theory. Demography We study the comprehensive, simultaneous interrelationships between countries, economic sectors (i.e., primary, secondary, and tertiary sector), capital structure and firm financial performance, especially involving the mediation effects in different sectors. We find that some determinants of capital structure do not only directly enhance firm financial performance. Firm financial performance is also influenced by how capital structure from the product category in the economic sectors have been financed. We find a significant relationship between capital structure and firm financial performance in the secondary and tertiary sectors but not for the primary sector. We find that the secondary sector tends to use internal financing while the tertiary sector tends to use external financing to enhance firm financial performance. Our results also reveal that the effect of capital structure on firm financial performance tends to be mediated by firm- and country specific attributes, as well as by the sector in which they operate. A closer examination of the data showed that in the economic sectors, we find robust results that there are not just positive direct and indirect effects, but also negative direct and indirect effects. It should be well understood by financial managers that secondary and tertiary sectors plays an important role in the mediation effect. The contribution of this study is to help the firm manager to make a good decision on the proportions of their capital structure. Auricle Technologies 2022 Article PeerReviewed text en https://eprints.ums.edu.my/id/eprint/34156/1/FULL%20TEXT.pdf text en https://eprints.ums.edu.my/id/eprint/34156/2/ABSTRACT.pdf Nur Ainna Ramli and Gilbert Nartea and Ahmad Fadly Nurullah Rasedee and Aslina Baharum (2022) The mediation effects of capital structure: Evidence from Malaysian and Indonesian economic sectors. Mathematical Statistician and Engineering Applications, 71. pp. 234-256. ISSN 2326-9865 https://www.philstat.org.ph/index.php/MSEA/article/view/82/77 https://doi.org/10.17762/msea.v71i2.82 https://doi.org/10.17762/msea.v71i2.82 |
| spellingShingle | HB1-3840 Economic theory. Demography Nur Ainna Ramli Gilbert Nartea Ahmad Fadly Nurullah Rasedee Aslina Baharum The mediation effects of capital structure: Evidence from Malaysian and Indonesian economic sectors |
| title | The mediation effects of capital structure: Evidence from Malaysian and Indonesian economic sectors |
| title_full | The mediation effects of capital structure: Evidence from Malaysian and Indonesian economic sectors |
| title_fullStr | The mediation effects of capital structure: Evidence from Malaysian and Indonesian economic sectors |
| title_full_unstemmed | The mediation effects of capital structure: Evidence from Malaysian and Indonesian economic sectors |
| title_short | The mediation effects of capital structure: Evidence from Malaysian and Indonesian economic sectors |
| title_sort | mediation effects of capital structure evidence from malaysian and indonesian economic sectors |
| topic | HB1-3840 Economic theory. Demography |
| url | https://eprints.ums.edu.my/id/eprint/34156/1/FULL%20TEXT.pdf https://eprints.ums.edu.my/id/eprint/34156/2/ABSTRACT.pdf |
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