An empirical investigation of picking order theory on hybrid securities: Evidence from Islamic capital market of Malaysia

Jaafar, Mohamad Nizam; Muhamat, Amirul Afif; Hashim, Hairulnizam; Ahmad, Ibrahim A.; Alwi, Sharifah Faigah Syed

doi:10.21833/ijaas.2017.03.014

Cited by 2 publications

(2 citation statements)

References 46 publications

(53 reference statements)

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“…Tin and Diaz (2017) discovered that bank size is the factor that affects leverage the most consistently throughout the big, medium, and small banks. Also, other authors have found a positive relationship between firm size and leverage (Anarfo, 2015;Shibru et al, 2015;Sheikh & Qureshi, 2017;Jaafar et al, 2017). Other studies in banks show opposite findings.…”

Section: Bank Sizementioning

confidence: 88%

The Capital Structure Determinants on Banking Sector of Western Balkan Countries

Ahmeti

Kalimashi

Ahmeti

et al. 2023

ECO

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The study examines the capital structure of the Western Balkan banking industry across the period 2015 - 2020. Forty-seven of the total Western Balkan-based commercial banks were included in the study. By constructing a balanced panel, this study uses pooled ordinary least squares fixed and random effects regressions to examine the relationship between bank book leverage as the dependent variable and bank-specific explanatory variables that include profitability, leverage ratio, bank size, earnings volatility, collateral, growth opportunities, and liquidity. These reports are examined using linear regression analysis. The study shows a significant positive relationship between profitability and book leverage for the period studied. In contrast, leverage ratio, earnings volatility, collateral, growth, and liquidity significantly negatively impact the book leverage of Western Balkan banks. The findings have practical implications for bank executives. They will assist them in identifying the bank-specific factors that influence the capital structure and selecting values that promote optimal capital structure. The findings of this study can help regulators develop an effective prudential framework. This study opens up new avenues for further research in this area for academics, researchers, and analysts.

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Section: Bank Sizementioning

confidence: 88%

The Capital Structure Determinants on Banking Sector of Western Balkan Countries

Ahmeti

Kalimashi

Ahmeti

et al. 2023

ECO

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“…The best combination of debt and equity will produce a low cost of capital, which in turn can maximize the value of the company (Ondraczek et al, 2015). ___________________________ Pecking Order theory and Trade off theory are theories of capital structure that are still considered competent, many studies have shown these two theories are able to explain the funding policy in various countries including Indonesia and Malaysia (Winarto, 2015;Handriani & Robiyanto, 2018;Goh 2018;Hadi, et al, 2018;Jaafar, et al, 2017 andJakpar, et al, 2017).…”

Section: Introductionmentioning

confidence: 99%

Firm Size as Moderator to Capital Structure-Its Determinants Relations

Sari

Sulastri

2019

J. Fin. Bank. Review

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Objective – Capital structure policy is a strategic decision related to the selection of funding sources. The best mixed of capital structure will produce a low cost of capital, which in turn can maximize the value of the company. This study aims to determine the effect of company size as a moderator on the relationship of capital structure and its determinant factors on manufacturing companies in Indonesia and Malaysia. Methodology – Data were collected from 40 manufacturing companies listed on the Indonesia Stock Exchange and 130 manufacturing companies listed on the Bursa Malaysia during 2008-2017. This study will analyze the determinants of capital structure consisting of liquidity, profitability, tangibility and efficiency as well as company size as a moderating variable. The research method uses panel data regression. Findings – The company size provides a moderating effect on the relationship between capital structure with liquidity, profitability, tangibility and efficiency, and this moderation effect is strengthened in large companies in Indonesia. Instead, this moderation effect is weakening for large companies in Malaysia Novelty – Research shows that the "modified pecking order" model is better able to explain the capital structure, policies of manufacturing companies in Indonesia and Malaysia compared to the traditional pecking order and trade off theory models. Type of Paper: Empirical Keywords: Capital Structure; Pecking Order Theory; Trade Off Theory; Manufacturing Company; Moderating Effect. Reference to this paper should be made as follows: Sari, M; Netti, S.N; Sulastri, S. 2019. Firm Size as Moderator to Capital Structure-Its Determinants Relations, J. Fin. Bank. Review 4 (3): 108–115 https://doi.org/10.35609/jfbr.2019.4.3(4) JEL Classification: G23, G30, G32.

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An empirical investigation of picking order theory on hybrid securities: Evidence from Islamic capital market of Malaysia

Cited by 2 publications

References 46 publications

The Capital Structure Determinants on Banking Sector of Western Balkan Countries

The Capital Structure Determinants on Banking Sector of Western Balkan Countries

Firm Size as Moderator to Capital Structure-Its Determinants Relations

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