Debt determinants of shariah approved firms: Empirical evidence from Malaysia

The issue of high reliance on debt has raised major concern since the impact of debt has created several downfalls of US’s big corporation such as Enron and Lehman Brothers. At wider scope, the impact of debt may also be evidenced by the Greek Depression in the year 2009. Various studies have been c...

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Main Authors:	Ramli, Nurshamimitul Ezza, Haron, Razali
Format:	Conference or Workshop Item
Language:	English
Published:	2016
Subjects:	HG4001 Financial management. Business finance. Corporation finance.
Online Access:	http://irep.iium.edu.my/54778/ http://irep.iium.edu.my/54778/14/54778.pdf

id	iium-54778
recordtype	eprints
spelling	iium-547782017-02-21T07:31:20Z http://irep.iium.edu.my/54778/ Debt determinants of shariah approved firms: Empirical evidence from Malaysia Ramli, Nurshamimitul Ezza Haron, Razali HG4001 Financial management. Business finance. Corporation finance. The issue of high reliance on debt has raised major concern since the impact of debt has created several downfalls of US’s big corporation such as Enron and Lehman Brothers. At wider scope, the impact of debt may also be evidenced by the Greek Depression in the year 2009. Various studies have been conducted to explain which factors that determine debt of the firms, given different setting of periods, countries and methodologies. Uniquely, this study focuses on the Shariah approved firms, firms which stocks are Shariah approved accordance to the Malaysia’s Securities Commission. This study covers a balanced panel of 239 Shariah approved firms listed on the Bursa Malaysia for the period of analysis from 2000 to 2014. To meet its objective, this study employs a static panel regression model which includes the pooled OLS, random effect model (REM) and fixed effect model (FEM). The study also conducts a robustness test to the empirical model. Several factors have been examined and the result shows that certain firm-specific variables like growth opportunity, size, bankruptcy risk, non-debt tax shield (NDTS) and Herfindahl-Hirschman Index, while the macro variables that include inflation, GDP and economic crisis are the robust evidence in determining the debt level of Shariah approved firms in Malaysia. In contrast with the prior studies that focuses on the non-Shariah approved firms, the output from this study provides new insight and understanding on the debt determinants of Shariah approved firms. This study also largely contributes in terms of the sampling selection in which a firm must be consistently being Shariah approved during the period of analysis. 2016 Conference or Workshop Item NonPeerReviewed application/pdf en http://irep.iium.edu.my/54778/14/54778.pdf Ramli, Nurshamimitul Ezza and Haron, Razali (2016) Debt determinants of shariah approved firms: Empirical evidence from Malaysia. In: 4th ASEAN International Conference on Islamic Finance (AICIF 2016), 6th-8th December 2016, Melaka. (Unpublished)
repository_type	Digital Repository
institution_category	Local University
institution	International Islamic University Malaysia
building	IIUM Repository
collection	Online Access
language	English
topic	HG4001 Financial management. Business finance. Corporation finance.
spellingShingle	HG4001 Financial management. Business finance. Corporation finance. Ramli, Nurshamimitul Ezza Haron, Razali Debt determinants of shariah approved firms: Empirical evidence from Malaysia
description	The issue of high reliance on debt has raised major concern since the impact of debt has created several downfalls of US’s big corporation such as Enron and Lehman Brothers. At wider scope, the impact of debt may also be evidenced by the Greek Depression in the year 2009. Various studies have been conducted to explain which factors that determine debt of the firms, given different setting of periods, countries and methodologies. Uniquely, this study focuses on the Shariah approved firms, firms which stocks are Shariah approved accordance to the Malaysia’s Securities Commission. This study covers a balanced panel of 239 Shariah approved firms listed on the Bursa Malaysia for the period of analysis from 2000 to 2014. To meet its objective, this study employs a static panel regression model which includes the pooled OLS, random effect model (REM) and fixed effect model (FEM). The study also conducts a robustness test to the empirical model. Several factors have been examined and the result shows that certain firm-specific variables like growth opportunity, size, bankruptcy risk, non-debt tax shield (NDTS) and Herfindahl-Hirschman Index, while the macro variables that include inflation, GDP and economic crisis are the robust evidence in determining the debt level of Shariah approved firms in Malaysia. In contrast with the prior studies that focuses on the non-Shariah approved firms, the output from this study provides new insight and understanding on the debt determinants of Shariah approved firms. This study also largely contributes in terms of the sampling selection in which a firm must be consistently being Shariah approved during the period of analysis.
format	Conference or Workshop Item
author	Ramli, Nurshamimitul Ezza Haron, Razali
author_facet	Ramli, Nurshamimitul Ezza Haron, Razali
author_sort	Ramli, Nurshamimitul Ezza
title	Debt determinants of shariah approved firms: Empirical evidence from Malaysia
title_short	Debt determinants of shariah approved firms: Empirical evidence from Malaysia
title_full	Debt determinants of shariah approved firms: Empirical evidence from Malaysia
title_fullStr	Debt determinants of shariah approved firms: Empirical evidence from Malaysia
title_full_unstemmed	Debt determinants of shariah approved firms: Empirical evidence from Malaysia
title_sort	debt determinants of shariah approved firms: empirical evidence from malaysia
publishDate	2016
url	http://irep.iium.edu.my/54778/ http://irep.iium.edu.my/54778/14/54778.pdf
first_indexed	2023-09-18T21:17:28Z
last_indexed	2023-09-18T21:17:28Z
_version_	1777411658298163200

Debt determinants of shariah approved firms: Empirical evidence from Malaysia

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