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Title:	Determinants and dynamism of capital structure :selected Southeast Asian countries
Authors:	Razali Haron (P37044)
Supervisor:	Fauzias Mat Nor, Prof. Dr.
Keywords:	Universiti Kebangsaan Malaysia -- Dissertations Dissertations, Academic -- Malaysia Corporations-Finance-Econometric models Corporations-Finance-Southeast Asia Corporations-Finance-Mathematical models Capital-Mathematical models Capital-Southeast Asia
Issue Date:	23-Feb-2012
Description:	The inconsistencies of results and inconclusiveness of findings on capital structure in past literature have been the main debatable issue in the finance literature past and present. This study is initially motivated by the issue of the analysed determinants being still inconclusive and the dynamic aspect of capital structure being relatively new in the area of capital structure. By employing panel data, this study is to examine the determinants influencing firm leverage and to analyse the dynamic aspect of capital structure of non-financial listed firms in the selected South East Asia countries, focusing on Malaysia (790 firms), Thailand (269 firms) and Singapore (546 firms) for the period of 2000-2009. Conducted using the static models (Pool Ordinary Least Square and Panel Fixed Effect) and dynamic model (Partial Adjustment Model), empirical analysis on the determinants reveals that country specific factors are significant in influencing the corporate financing decisions in the region along with firm specific factors. Our findings reveal that results are sensitive to models employed and definition used on leverage. The agency theory and the trade-off theory are found to be the dominant theories governing the corporate financing decision with traces of market timing theory, without neglecting strong evidence of hierarchy practiced in firms' financing decision. Our finding on agency theory being dominant justifies the function of short term debt as a controlling mechanism to mitigate the agency problem arises within firms in the region. The study on dynamism of capital structure is conducted using the dynamic partial adjustment model estimated based on the Generalized Method of Moment (GMM-First Difference). This aspect covers the existence of target capital structure, speed of adjustment, factors affecting speed of adjustment, firm rational financing behaviour and long run parameters of dynamic capital structure. Study on factors affecting speed of adjustment and firm rational financing behaviour is a new contribution to the literature as no work has been done regarding these issues in this region. Target level of leverage of firms does exist in the region and firms do adjust to be at their target leverage from time to time thus denoting the existence of dynamic trade-off theory. Firms in the region are found to be under-adjust, being below the required adjustment to be at the target within a year. Comparatively, Singapore recorded the highest speed of adjustment followed by Thailand and Malaysia. Higher short term debt is evidenced in capital structure causes higher speed of adjustment. The study also analyses firm-specific factors affecting speed of adjustment. There is strong evidence on the negative relationship between speed of adjustment and distance from target leverage which suggests that firms in the region adjust faster if not being far from target. Firm size and profitability significantly influence speed of adjustment for firms in the region. The study extends its scope by analysing firm rational financing behaviour. Results show that firms in the region are generally over-levered during period under study. Finally, long run parameter is deduced from the dynamic model which illustrates underestimation on the impact of explanatory variable on target leverage if computation is done based on short run perspective. There is a case of underestimation indicated in this study.,Certification of Masters/ Doctorial Thesis" is not available
Pages:	238
Call Number:	HG4012.R349
Publisher:	UKM, Bangi
Appears in Collections:	Graduate School of Business / Pusat Pengajian Siswazah Perniagaan

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