The Joint Determination of Leverage and Maturity: Empirical Evidence from Malaysia  

Oleh:

Aprilia, Rini

Jenis: Article from Journal - e-Journal
Dalam koleksi: Jurnal Forum Bisnis dan Kewirausahaan vol. 2 no. 1 (Sep. 2012), page 1-16.
Topik: Simultaneity; Capital Structure; Debt maturity
Fulltext: RINI - Bernard.pdf (388.42KB)

Isi artikel

This study empirically investigates the simultaneity between leverage and debt maturity policies and the factors that influences them by using a simultaneous equation framework in which leverage and debt maturity are endogenous variables. Based on a panel data of 788 non-financial firms listed on Bursa Malaysia from 1999 until 2010. The simultaneity between leverage and debt maturity is tested by utilizing a two-stage least squares (2SLS) regression model. The results of this study show that leverage and debt maturity policies have a negative simultaneous relationship which indicates that there are strategic complementarities between leverage and maturity. This study also documents different results among the exogenous variables in both equations, in which growth opportunities, regulation, firm size, profitability and tangibility lend considerable support to the proposed hypotheses on the leverage equation. Meanwhile, firm size, regulation, abnormal earnings and tangibility are found to have significant effects on the debt maturity equation.

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