Firms indebtedness: a panel data analysis / Suhaila Abdul Latif

Construction sector can be said as the key development of the countries, due to the main roles of this sector which is as main contributor towards the national income of the country. The changing in the construction environment is also influenced by many factors. The main factor is about the cost that incurred by the firm in this sector, it also will lead them suffer the greater level of debt. Therefore, the purpose of this research is to analyse the determinants of level indebtedness among the Listed Construction Firm in Bursa Malaysia during the period 2004 until 2016. The variables used in this study are firm performance, firm size, liquidity, firm growth, reputation as the factors that affect the level indebtedness among the construction firms. In addition the financial development in Malaysia is one factor that expected will give effect on the level of indebtedness firms. This study uses panel data analysis to determine the factors that affecting the level of indebtedness. The result of FE model shows that firm performance and firm size have positive relationship with the debt ratio, while liquidity, annual growth, financial development and firm age have negative relationship with debt ratio.