Debt determinants of shari’ah approved firms: Empirical evidence from Malaysia

The issue of high reliance on debt has raised major concern especially since its impact has been linked to the several corporate problems in United States’ big corporations such as Enron and Lehman Brothers. On a wider scope, the impact of debt may also be evidenced by the Greek Depression in the ye...

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Main Authors:	Ramli, Nurshamimitul Ezza, Haron, Razali
Format:	Article
Language:	English
Published:	IIUM Press 2017
Subjects:	HG3368 Islamic Banking and Finance
Online Access:	http://irep.iium.edu.my/61293/ http://irep.iium.edu.my/61293/ http://irep.iium.edu.my/61293/1/014-014-r%20-%20ezza.pdf

id	iium-61293
recordtype	eprints
spelling	iium-612932018-01-11T08:48:33Z http://irep.iium.edu.my/61293/ Debt determinants of shari’ah approved firms: Empirical evidence from Malaysia Ramli, Nurshamimitul Ezza Haron, Razali HG3368 Islamic Banking and Finance The issue of high reliance on debt has raised major concern especially since its impact has been linked to the several corporate problems in United States’ big corporations such as Enron and Lehman Brothers. On a 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 determine debt of the firms, given different setting of periods, countries and methodologies. Uniquely, this study focuses on the firms which stocks are Shari’ah approved in accordance to the Malaysia’s Securities Commission guidelines. 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 are significant determinants of a firm’s debt. Also macro variables such as inflation, GDP and economic crisis are also found to be significant determinants of Shariah approved firms’ debt. 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. IIUM Press 2017-12-31 Article PeerReviewed application/pdf en http://irep.iium.edu.my/61293/1/014-014-r%20-%20ezza.pdf Ramli, Nurshamimitul Ezza and Haron, Razali (2017) Debt determinants of shari’ah approved firms: Empirical evidence from Malaysia. Journal of Islamic Finance, 6 (Special Issue). pp. 188-204. ISSN 2289-2109 E-ISSN 2289-2117 http://journals.iium.edu.my/iiibf-journal/index.php/jif/article/view/266
repository_type	Digital Repository
institution_category	Local University
institution	International Islamic University Malaysia
building	IIUM Repository
collection	Online Access
language	English
topic	HG3368 Islamic Banking and Finance
spellingShingle	HG3368 Islamic Banking and Finance Ramli, Nurshamimitul Ezza Haron, Razali Debt determinants of shari’ah approved firms: Empirical evidence from Malaysia
description	The issue of high reliance on debt has raised major concern especially since its impact has been linked to the several corporate problems in United States’ big corporations such as Enron and Lehman Brothers. On a 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 determine debt of the firms, given different setting of periods, countries and methodologies. Uniquely, this study focuses on the firms which stocks are Shari’ah approved in accordance to the Malaysia’s Securities Commission guidelines. 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 are significant determinants of a firm’s debt. Also macro variables such as inflation, GDP and economic crisis are also found to be significant determinants of Shariah approved firms’ debt. 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.
format	Article
author	Ramli, Nurshamimitul Ezza Haron, Razali
author_facet	Ramli, Nurshamimitul Ezza Haron, Razali
author_sort	Ramli, Nurshamimitul Ezza
title	Debt determinants of shari’ah approved firms: Empirical evidence from Malaysia
title_short	Debt determinants of shari’ah approved firms: Empirical evidence from Malaysia
title_full	Debt determinants of shari’ah approved firms: Empirical evidence from Malaysia
title_fullStr	Debt determinants of shari’ah approved firms: Empirical evidence from Malaysia
title_full_unstemmed	Debt determinants of shari’ah approved firms: Empirical evidence from Malaysia
title_sort	debt determinants of shari’ah approved firms: empirical evidence from malaysia
publisher	IIUM Press
publishDate	2017
url	http://irep.iium.edu.my/61293/ http://irep.iium.edu.my/61293/ http://irep.iium.edu.my/61293/1/014-014-r%20-%20ezza.pdf
first_indexed	2023-09-18T21:26:55Z
last_indexed	2023-09-18T21:26:55Z
_version_	1777412253152182272

Debt determinants of shari’ah approved firms: Empirical evidence from Malaysia

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