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Does Financing Decision Influence Corporate Performance in Malaysia?

Author

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  • Wan Mohd Nazri Wan Daud

    (Faculty of Economic and Management Sciences, Universiti Sultan ZainalAbidin, Malaysia,)

  • Norlia Mat Norwani

    (Faculty of Management and Economics, Universiti Pendidikan Sultan Idris, Malaysia,)

  • Anizawati Ahmad Mansor

    (Faculty of Education, Universiti Kebangsaan Malaysia,)

  • Wan Anisah Endut

    (Faculty of Economic and Management Sciences, Universiti Sultan Zainal Abidin, Malaysia.)

Abstract

This paper examined the impact of financing decision on performance among Malaysian public listed firms in Bursa Malaysia. Previous studies did not examine the relationship between selection of capital structure and performance in the perspective of firms that implement industrial diversification strategy. This research comprised of 76 firms and covering balanced panel data series for the period of 1994-2007. The study observed that capitals structure has insignificant relationship with performance. However, it is recommended that firms should wary in using debt financing to finance business operation as it could lead to performance discount. Finding of the research contributed in explaining the capital structure decision made in the firms that implement industrial diversifications. Future research should investigate the option of firms that implement international diversification and its impact on corporate performance.

Suggested Citation

  • Wan Mohd Nazri Wan Daud & Norlia Mat Norwani & Anizawati Ahmad Mansor & Wan Anisah Endut, 2016. "Does Financing Decision Influence Corporate Performance in Malaysia?," International Journal of Economics and Financial Issues, Econjournals, vol. 6(3), pages 1165-1171.
    • Handle: RePEc:eco:journ1:2016-03-45
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    References listed on IDEAS

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    Cited by:

    1. Azib Azib & Dedy Ansari Harahap & Dita Amanah, 2020. "The manufacturing company performance: The effect of internationalization and funding decision," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 9(4), pages 220-227, July.

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    More about this item

    Keywords

    Financing decision; industrial diversification; Performance;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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