Capital Structure of Surviving Family Firm in Malaysia

Abstract

This paper examines the relationship between the determinants and capital structure of surviving family firm in Malaysia with 151 listed companies from 2000 to 2015. Tangibility, growth opportunities, profitability and liquidity as determinants and short term debt, long term debt and debt ratio are the dependent variables. By using panel data, all determinants are significant to debt ratio for surviving family. In a nutshell, surviving family companies prefer to use internal sources as main priority for financial leverage decisions to sustain its business. The results reveal that surviving companies have sufficient liquid assets, can utilize these funds to finance business activities and have lower leverage.

The Relevance of Sectoral Clustering in Corporate Debt Policy: The Case Study of Slovak Enterprises

“…Enterprises operating in the same sector have certain similar characteristics, such as the products they sell, how their production costs are structured, the technologies they employ Nagy and Lazaroiu 2022), and their levels of profitability, while these tendencies are also manifested in the area of corporate capital structure. According to Ibrahim and Lau (2019), each industry has a distinct average total debt ratio. Since Schwartz and Aronson (1967) first outlined the relationship between industry affiliation and the capital structures of corporations in the United States, more than 50 years have passed.…”