Revisiting capital structure theory : a test of pecking order and static order trade-of model from Malaysian capital market

Ali Ahmed, Huson Joher and Hisham, Nazrul 2009, Revisiting capital structure theory : a test of pecking order and static order trade-of model from Malaysian capital market, International research journal of finance and economics, vol. 30, pp. 58-65.

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Title Revisiting capital structure theory : a test of pecking order and static order trade-of model from Malaysian capital market
Author(s) Ali Ahmed, Huson Joher
Hisham, Nazrul
Journal name International research journal of finance and economics
Volume number 30
Start page 58
End page 65
Total pages 8
Publisher European Journals
Place of publication [London, England]
Publication date 2009-08
ISSN 1450-2887
Keyword(s) Pecking order
Static-order-trade-off
internal fund deficiency
capital structure
Summary This study revisits the capital structure theory and test Pecking Order Hypothesis (POH) and Static Order Trade-off theory (STOT) using Malaysian Listed firms over a period from 1999 to 2002. The evidence from pecking order model suggests that the internal fund deficiency is the most important determinant that possibly explains the issuance of new debt in Malaysian capital market despite the lower predicting power.  While static trade off-model is not fit to explain the issuance of new debt issue in Malaysian capital market. This is an interesting findings that confirm the fact that Malaysian firms do not too much care about tax-shield benefit derive from employ both debt and non-debt tax-shield. The finn's size, which is used to neutralize the size effect, appears to provide some explanation for the variation in its capital structure policy choice; however asset structure and growth no evidence of static-order-trade-off is observed in Malaysian capital market.
Language eng
Field of Research 140304 Panel Data Analysis
Socio Economic Objective 910206 Market-Based Mechanisms
HERDC Research category C1 Refereed article in a scholarly journal
HERDC collection year 2009
Copyright notice ©2009, EuroJournals Publishing
Persistent URL http://hdl.handle.net/10536/DRO/DU:30016739

Document type: Journal Article
Collections: Faculty of Business and Law
School of Accounting, Economics and Finance
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