Factors affecting bankruptcy in Malaysia / Syammeera Khaleesa Khalid and Zarul Imran Zulkifli

Personal bankruptcy is one of the main concerns by the policy maker in nowadays. The reason being is the increasing trend of bankruptcy in Malaysia will essentially became a stumbling block for Malaysia to become a “high-income status nation” by 2020. Unfortunately, the problem of bankruptcy is still increasing from year to year and this has raised the interest to study what is some of the possible relevant factors that lead to the bankruptcy. The purpose of this study is to investigate the impact of divorce rate, gross net income, lending rate, total public debt and unemployment rate on bankruptcy. This study used 30 yearly data for observations which is from 1985 until 2014. The method used for this study is Multiple Linear Regressions. This study used E-Views software in order to run all the data collected to test and analyses the results for discussions. In this study, the results show all these independent variables are significant except for marital status/ divorce rate. Based on previous studies, mostly agree that divorce rate, gross net income, lending rate, total public debt and unemployment rate plays their own roles in determined the conditions of bankruptcy.