The determinants of capital structure of SMEs in Malaysia: evidence from diverse plastic product manufacturers

The determinants of capital structure of SMEs in Malaysia: evidence from diverse plastic product manufacturers

The success of a company, especially Small and Medium Enterprises (SMEs), depends on the right decision in relation to its capital structure, whether to choose debt and/or equity. This paper analysed the capital structure of SMEs focusing on diverse plastic product manufacturers in Malaysia. In orde...

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Main Author: Salmawatti, Mohd Sharif
Format: Thesis
Language:eng
Published: 2016
Subjects:
HG Finance
Online Access:https://etd.uum.edu.my/6222/1/s815692_01.pdf
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id my-uum-etd.6222
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institution Universiti Utara Malaysia
collection UUM ETD
language eng
advisor Ghazali, Zahiruddin
topic HG Finance
spellingShingle HG Finance
Salmawatti, Mohd Sharif
The determinants of capital structure of SMEs in Malaysia: evidence from diverse plastic product manufacturers
description The success of a company, especially Small and Medium Enterprises (SMEs), depends on the right decision in relation to its capital structure, whether to choose debt and/or equity. This paper analysed the capital structure of SMEs focusing on diverse plastic product manufacturers in Malaysia. In order to determine the capital structure of selected SMEs, the regression analysis was performed by focusing on the financial performance of 127 companies in the diverse plastic product industry in Malaysia from the period of 2009 to 2013. In this paper, the short term and long term debts ratio are used to represent capital structure as the Dependent Variables. Meanwhile, age, size, profitability, asset structure, and growth are used as the Independent Variables. The result has confirmed that the SMEs business is in line with the Pecking Order Theory but not parallel with the Trade-off Theory. This study found that age, size, profitability, and asset structure are the major determinants of capital structure of SMEs. Age is positively related to the short term debts ratio. Meanwhile, size is negatively related to the short term debts ratio. In addition, this paper found that profitability is negatively related to both short term and long term debt ratio while asset structure is positively related to both short term and long term debt ratio. Growth factor does not influence the capital structure of the SMEs.
format Thesis
qualification_name other
qualification_level Master's degree
author Salmawatti, Mohd Sharif
author_facet Salmawatti, Mohd Sharif
author_sort Salmawatti, Mohd Sharif
title The determinants of capital structure of SMEs in Malaysia: evidence from diverse plastic product manufacturers
title_short The determinants of capital structure of SMEs in Malaysia: evidence from diverse plastic product manufacturers
title_full The determinants of capital structure of SMEs in Malaysia: evidence from diverse plastic product manufacturers
title_fullStr The determinants of capital structure of SMEs in Malaysia: evidence from diverse plastic product manufacturers
title_full_unstemmed The determinants of capital structure of SMEs in Malaysia: evidence from diverse plastic product manufacturers
title_sort determinants of capital structure of smes in malaysia: evidence from diverse plastic product manufacturers
granting_institution Universiti Utara Malaysia
granting_department School of Economics, Finance & Banking
publishDate 2016
url https://etd.uum.edu.my/6222/1/s815692_01.pdf
_version_ 1747828039937425408
spelling my-uum-etd.62222021-04-19T07:01:25Z The determinants of capital structure of SMEs in Malaysia: evidence from diverse plastic product manufacturers 2016 Salmawatti, Mohd Sharif Ghazali, Zahiruddin School of Economics, Finance & Banking School of Economics, Finance and Banking HG Finance The success of a company, especially Small and Medium Enterprises (SMEs), depends on the right decision in relation to its capital structure, whether to choose debt and/or equity. This paper analysed the capital structure of SMEs focusing on diverse plastic product manufacturers in Malaysia. In order to determine the capital structure of selected SMEs, the regression analysis was performed by focusing on the financial performance of 127 companies in the diverse plastic product industry in Malaysia from the period of 2009 to 2013. In this paper, the short term and long term debts ratio are used to represent capital structure as the Dependent Variables. Meanwhile, age, size, profitability, asset structure, and growth are used as the Independent Variables. The result has confirmed that the SMEs business is in line with the Pecking Order Theory but not parallel with the Trade-off Theory. This study found that age, size, profitability, and asset structure are the major determinants of capital structure of SMEs. Age is positively related to the short term debts ratio. Meanwhile, size is negatively related to the short term debts ratio. In addition, this paper found that profitability is negatively related to both short term and long term debt ratio while asset structure is positively related to both short term and long term debt ratio. Growth factor does not influence the capital structure of the SMEs. 2016 Thesis https://etd.uum.edu.my/6222/ https://etd.uum.edu.my/6222/1/s815692_01.pdf text eng public other masters Universiti Utara Malaysia Abor, J. (2007). 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