The determinants of short and long term debt in Malaysian SMEs

The success of Small and Medium Enterprises (SMEs) industries, depending on the decisions relating to the capital structure, whether to choose a debt and/or equity. This paper analyses the capital structure focusing on the SME food and beverage services in Malaysia. To determine the capital structur...

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Main Author:	Che Suriaty, Disa
Format:	Thesis
Language:	eng eng
Published:	2017
Subjects:	HG Finance
Online Access:	https://etd.uum.edu.my/7556/1/s815226_01.pdf https://etd.uum.edu.my/7556/2/s815226_02.pdf
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id	my-uum-etd.7556
record_format	uketd_dc
institution	Universiti Utara Malaysia
collection	UUM ETD
language	eng eng
advisor	Ghazali, Zahiruddin
topic	HG Finance
spellingShingle	HG Finance Che Suriaty, Disa The determinants of short and long term debt in Malaysian SMEs
description	The success of Small and Medium Enterprises (SMEs) industries, depending on the decisions relating to the capital structure, whether to choose a debt and/or equity. This paper analyses the capital structure focusing on the SME food and beverage services in Malaysia. To determine the capital structure of selected SMEs, regression analysis was performed with a focus on the financial performance of 80 companies in the food and beverage industry in Malaysia from the period 2009-2015. In this paper, the ratio of long-term debt and short-term that is used to represent the capital structure as the dependent variable. Meanwhile, the size, profitability, growth, liquidity, asset tangibility, and age were used as independent variables. The results have confirmed that the SME business is in line with the pecking order theory but not in line with the Trade-off Theory. This study found that growth, liquidity, the tangibility of assets, and the age of the firm are key determinants of capital structure for financing SMEs either short term or long term. Growth is negatively related to the short-term debts ratio. Meanwhile, liquidity is negatively related to the short-term debts ratio. In addition, this paper found that tangibility of assets associated with negative short-term and age was negatively on long-term debts ratio. This study also found that growth and liquidity have a positively related to long-term debts ratio. However, the size and profitability of firm do not affect the capital structure of SMEs.
format	Thesis
qualification_name	other
qualification_level	Master's degree
author	Che Suriaty, Disa
author_facet	Che Suriaty, Disa
author_sort	Che Suriaty, Disa
title	The determinants of short and long term debt in Malaysian SMEs
title_short	The determinants of short and long term debt in Malaysian SMEs
title_full	The determinants of short and long term debt in Malaysian SMEs
title_fullStr	The determinants of short and long term debt in Malaysian SMEs
title_full_unstemmed	The determinants of short and long term debt in Malaysian SMEs
title_sort	determinants of short and long term debt in malaysian smes
granting_institution	Universiti Utara Malaysia
granting_department	School of Economics, Finance & Banking
publishDate	2017
url	https://etd.uum.edu.my/7556/1/s815226_01.pdf https://etd.uum.edu.my/7556/2/s815226_02.pdf
_version_	1747828233752018944
spelling	my-uum-etd.75562021-05-02T03:41:17Z The determinants of short and long term debt in Malaysian SMEs 2017 Che Suriaty, Disa Ghazali, Zahiruddin School of Economics, Finance & Banking School of Economics, Finance & Banking HG Finance The success of Small and Medium Enterprises (SMEs) industries, depending on the decisions relating to the capital structure, whether to choose a debt and/or equity. This paper analyses the capital structure focusing on the SME food and beverage services in Malaysia. To determine the capital structure of selected SMEs, regression analysis was performed with a focus on the financial performance of 80 companies in the food and beverage industry in Malaysia from the period 2009-2015. In this paper, the ratio of long-term debt and short-term that is used to represent the capital structure as the dependent variable. Meanwhile, the size, profitability, growth, liquidity, asset tangibility, and age were used as independent variables. The results have confirmed that the SME business is in line with the pecking order theory but not in line with the Trade-off Theory. This study found that growth, liquidity, the tangibility of assets, and the age of the firm are key determinants of capital structure for financing SMEs either short term or long term. Growth is negatively related to the short-term debts ratio. Meanwhile, liquidity is negatively related to the short-term debts ratio. In addition, this paper found that tangibility of assets associated with negative short-term and age was negatively on long-term debts ratio. This study also found that growth and liquidity have a positively related to long-term debts ratio. However, the size and profitability of firm do not affect the capital structure of SMEs. 2017 Thesis https://etd.uum.edu.my/7556/ https://etd.uum.edu.my/7556/1/s815226_01.pdf text eng public https://etd.uum.edu.my/7556/2/s815226_02.pdf text eng public other masters Universiti Utara Malaysia Abor, J. & Biekpe, N. (2009), How do we explain the capital structure of SMEs in sub-Saharan Africa? Evidence from Ghana Journal of Economic Studies, 36 (1), 83-97. Abdul Jamal, A. A., Geetha, C., Mohidin, R., Abdul Karim, M.R., Lim, T.S. and Ch'ng, V. (2013). Capital Structure Decisions: Evidence from Large Capitalized Companies in Malaysia. Interdisciplinary Journal of Contemporary Research in Business, [e-journal] 5(5), Available at: ijcrb.webs.com [Accessed 30 Oct 2013] Ab. Wahab, I. and Buyong, S. Z. (2008) "Financing Technology-Bases SMEs in Malaysia: Practices and Problems". 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The determinants of short and long term debt in Malaysian SMEs

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