Determinants of capital structure: evidence from Malaysian construction companies / Aqilah Hani Abd Wahab

Construction companies are well known as a capital intensive industry. The firm requires strong capital background in order to complete the project given within the time due. Therefore, the lack or poor structure in capital will affect the company operations and performance. There are two way for the company to structure their capital. The company selected is the ten (10) construction companies that are listed in Kuala Lumpur Stock Exchange (KLSE). This research is to investigate whether the companies prefer for internal or external financing in ensuring the smoothness of the project. The methodology in this research is using panel data in Eviews. The dependent variable is debt ratio and four (4) independent variables consist of growth opportunity, share of fixed asset, effective tax rate and return on asset. The result of this study indicated only Tangibility is significant to the debt ratio. Thus, this study gives some support for future research.