The determinants of capital structure on plantation sector in Malaysia / Siti Hazmah Tindu

The purpose of this study is to analyze the factors affecting the capital structure of a business in the plantation sector in Malaysia. The factors that influence the level of debt in this study are profitability, asset tangibility, firm size and liquidity. The data was taken from 44 plantation companies listed in Bursa Malaysia. Nonetheless, after the filtration process, only 26 companies from the plantation sector in Malaysia have been chosen for the duration 2010-2018. This study uses panel data and the regression model is focused on Pearson Correlation and Multiple Linear Regression. The subject variable of this analysis is the capital structure that is calculated by the debt ratio. The independent variables of this analysis are profitability, asset tangibility, firm size and liquidity. There are two theories used in this study that are pecking order theory and trade off theory. The findings of this study indicate that the firm size has a positive relationship to the debt ratio. Nonetheless, profitability, asset tangibility and liquidity have a negative impact on the debt ratio.