Capital Structure Determinants of SME Shariah Compliant Companies

DOI

10.2991/icbmr-17.2017.16How to use a DOI?

Keywords

capital structure, capital structure theories, leverage, SMEs, shariah compliant companies

Abstract

Capital structure covers the components of capital in a company and has implications on the total financing cost of a company. This study examines the capital structure of Malaysian Small and Medium Enterprise (SME) shariah-compliant companies that are listed in the Bursa Malaysia. The aim of the study is to identify the factors and the relationship of these factors with the capital structure of the SME shariah-compliant companies. In this study, 18 SME shariah-compliant companies were examined from the period of 2005 until 2014. Capital structure was proxied by debt ratio and the determinant variables used in this study were age of firm, firm asset tangibility, firm liquidity, firm profitability, firm growth rate and firm taxation payments. The pooled ordinary least square (POLS) multiple regression estimation was used and the findings showed that age of firm, firm asset tangibility, and firm liquidity are the determinants that influenced the capital structure of the SME shariah compliant companies. The results also indicated that firm asset tangibility, firm growth rate and firm taxation payments have a positive relationship while age of firm, firm liquidity and firm profitability have a negative relationship with the debt ratio of the SME shariah-compliant companies listed in the Bursa Malaysia.

Copyright

© 2017, the Authors. Published by Atlantis Press.

Open Access

This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

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TY  - CONF
AU  - Mazila Md-Yusuf
PY  - 2017/11
DA  - 2017/11
TI  - Capital Structure Determinants of SME Shariah Compliant Companies
BT  - Proceedings of the International Conference on Business and Management Research (ICBMR 2017)
PB  - Atlantis Press
SP  - 168
EP  - 175
SN  - 2352-5428
UR  - https://doi.org/10.2991/icbmr-17.2017.16
DO  - 10.2991/icbmr-17.2017.16
ID  - Md-Yusuf2017/11
ER  -