Ownership concentration and capital structure: Malaysian evidence
This dissertation investigates the relationship between ownership concentration and capital structure. This dissertation also examines the relationship between firm’s financial characteristics (profitability, firm size, asset tangibility liquidity) and capital structure. Both objectives are explored...
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| Format: | Thesis |
| Language: | eng eng |
| Published: |
2014
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| Subjects: | |
| Online Access: | https://etd.uum.edu.my/4174/1/s813365.pdf https://etd.uum.edu.my/4174/2/s813365_abstract.pdf |
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| Summary: | This dissertation investigates the relationship between ownership concentration and capital structure. This dissertation also examines the relationship between firm’s financial characteristics (profitability, firm size, asset tangibility liquidity) and capital structure. Both objectives are explored by employing 48 Malaysian public listed firms for the period of 5 financial years, spanning from 2008 to 2012. There are two proxies used to measure ownership concentration; the natural log of total number of shareholders and the fraction of shares hold by the top five largest shareholders. The regression result shows a significantly negative relationship between the fractions of top five shareholdings and leverage ratio, which means that concentrated firms hold lesser debt than dispersed ownership firms. Contradict to agency theory, this finding indicates that MCCG 2012 is still lacking in the area of shareholder’s protection as stated by the World Bank in their recent assessment on MCCG 2012. By looking at the relationship between ownership concentration and capital structure, this dissertation contributes to literature by investigating the effectiveness of MCCG 2012 in addressing and executing shareholder’s right and protection in Malaysia. In addition, this dissertation also finds that profitability, firm size, asset tangibility, and liquidity are the significant determinants of capital structure for Malaysian firms. |
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