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 concentratio...
| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
| Published: |
EconJournals
2016
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| Subjects: | |
| Online Access: | https://repo.uum.edu.my/id/eprint/26117/1/IJEF%206%20S3%202016%2036%2043.pdf |
| _version_ | 1825805414034309120 |
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| author | Kadir Shahar, Hanita Abdul Adzis, Azira Baderi, Nureliana |
| author_facet | Kadir Shahar, Hanita Abdul Adzis, Azira Baderi, Nureliana |
| author_sort | Kadir Shahar, Hanita |
| collection | UUM |
| 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 behavior. 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. |
| first_indexed | 2024-07-04T06:31:56Z |
| format | Article |
| id | uum-26117 |
| institution | Universiti Utara Malaysia |
| language | English |
| last_indexed | 2024-07-04T06:31:56Z |
| publishDate | 2016 |
| publisher | EconJournals |
| record_format | eprints |
| spelling | uum-261172019-06-18T01:35:46Z https://repo.uum.edu.my/id/eprint/26117/ The relationship between ownership structure, firm specific characteristics and capital structure: evidence from Malaysian middle-capital public listed firms Kadir Shahar, Hanita Abdul Adzis, Azira Baderi, Nureliana HC Economic History and Conditions 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 behavior. 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. EconJournals 2016 Article PeerReviewed application/pdf en https://repo.uum.edu.my/id/eprint/26117/1/IJEF%206%20S3%202016%2036%2043.pdf Kadir Shahar, Hanita and Abdul Adzis, Azira and Baderi, Nureliana (2016) 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, 6 (S3). pp. 36-43. ISSN 2146-4138 http://econjournals.com/index.php/ijefi/article/view/2579 |
| spellingShingle | HC Economic History and Conditions Kadir Shahar, Hanita Abdul Adzis, Azira Baderi, Nureliana The relationship between ownership structure, firm specific characteristics and capital structure: evidence from Malaysian middle-capital public listed firms |
| 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 |
| topic | HC Economic History and Conditions |
| url | https://repo.uum.edu.my/id/eprint/26117/1/IJEF%206%20S3%202016%2036%2043.pdf |
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