Accounting variables as determinants of systematic risk in Malaysian common stocks
The objective of this paper is to examine the relationship between financial accounting variables and systematic securities risk in a small and developing capital market, namely the Kuala Lumpur Stock Exchange. Factor analysis was used to group and identify the financial variables into independent d...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
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Springer Science and Business Media LLC
1989
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| Online Access: | http://psasir.upm.edu.my/id/eprint/115093/ http://psasir.upm.edu.my/id/eprint/115093/1/115093.pdf |
| _version_ | 1848866683363524608 |
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| author | Chun, Loo Sin Ramasamy, Meharani |
| author_facet | Chun, Loo Sin Ramasamy, Meharani |
| author_sort | Chun, Loo Sin |
| building | UPM Institutional Repository |
| collection | Online Access |
| description | The objective of this paper is to examine the relationship between financial accounting variables and systematic securities risk in a small and developing capital market, namely the Kuala Lumpur Stock Exchange. Factor analysis was used to group and identify the financial variables into independent dimensions. The possible bias due to multicollinearity between accounting data was ameliorated by selecting one representative variable from each factor profile of the firm. Evidence has shown that financial ratios/profitability ratio and, to a certain extent, activity ratio are important determinants of the systematic risk of a common stock. Contrary to most of the reported findings in other markets, the results show a negative relationship between leverage ratio and systematic risk, for which we have no explanation. |
| first_indexed | 2025-11-15T14:24:30Z |
| format | Article |
| id | upm-115093 |
| institution | Universiti Putra Malaysia |
| institution_category | Local University |
| language | English |
| last_indexed | 2025-11-15T14:24:30Z |
| publishDate | 1989 |
| publisher | Springer Science and Business Media LLC |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | upm-1150932025-02-19T07:48:55Z http://psasir.upm.edu.my/id/eprint/115093/ Accounting variables as determinants of systematic risk in Malaysian common stocks Chun, Loo Sin Ramasamy, Meharani The objective of this paper is to examine the relationship between financial accounting variables and systematic securities risk in a small and developing capital market, namely the Kuala Lumpur Stock Exchange. Factor analysis was used to group and identify the financial variables into independent dimensions. The possible bias due to multicollinearity between accounting data was ameliorated by selecting one representative variable from each factor profile of the firm. Evidence has shown that financial ratios/profitability ratio and, to a certain extent, activity ratio are important determinants of the systematic risk of a common stock. Contrary to most of the reported findings in other markets, the results show a negative relationship between leverage ratio and systematic risk, for which we have no explanation. Springer Science and Business Media LLC 1989 Article PeerReviewed text en http://psasir.upm.edu.my/id/eprint/115093/1/115093.pdf Chun, Loo Sin and Ramasamy, Meharani (1989) Accounting variables as determinants of systematic risk in Malaysian common stocks. Asia Pacific Journal of Management, 6 (2). pp. 339-350. ISSN 0217-4561; eISSN: 1572-9958 https://link.springer.com/article/10.1007/BF01733773?error=cookies_not_supported&code=4b0df7c3-2834-49c8-ae9b-5c3ec53f4794 10.1007/BF01733773 |
| spellingShingle | Chun, Loo Sin Ramasamy, Meharani Accounting variables as determinants of systematic risk in Malaysian common stocks |
| title | Accounting variables as determinants of systematic risk in Malaysian common stocks |
| title_full | Accounting variables as determinants of systematic risk in Malaysian common stocks |
| title_fullStr | Accounting variables as determinants of systematic risk in Malaysian common stocks |
| title_full_unstemmed | Accounting variables as determinants of systematic risk in Malaysian common stocks |
| title_short | Accounting variables as determinants of systematic risk in Malaysian common stocks |
| title_sort | accounting variables as determinants of systematic risk in malaysian common stocks |
| url | http://psasir.upm.edu.my/id/eprint/115093/ http://psasir.upm.edu.my/id/eprint/115093/ http://psasir.upm.edu.my/id/eprint/115093/ http://psasir.upm.edu.my/id/eprint/115093/1/115093.pdf |