Board of directors and capital structure: evidence from leading Malaysian companies
Malaysia is one of the rapidly developing economies in South-East Asia which embraces the concept of good corporate governance due to the 1997-1998 Asian financial crises. This study investigates the relationship between board of directors and company’s capital structure in an emerging market, Malay...
| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
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Canadian Center of Science and Education
2012
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| Online Access: | http://psasir.upm.edu.my/id/eprint/22837/ http://psasir.upm.edu.my/id/eprint/22837/1/22837.pdf |
| _version_ | 1848844594167414784 |
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| author | Teh, Boon Heng Azrbaijani, Shabnam Ong, Tze San |
| author_facet | Teh, Boon Heng Azrbaijani, Shabnam Ong, Tze San |
| author_sort | Teh, Boon Heng |
| building | UPM Institutional Repository |
| collection | Online Access |
| description | Malaysia is one of the rapidly developing economies in South-East Asia which embraces the concept of good corporate governance due to the 1997-1998 Asian financial crises. This study investigates the relationship between board of directors and company’s capital structure in an emerging market, Malaysia. This research paper covers 75 non-financial leading Malaysian companies, which are employed as a price index, listed on Kuala Lumpur stock exchange (KLSE) from the year 2005 to 2008 fiscal years. A multiple regression analysis has been used to examine the linkage between board of director’s features and capital structure decisions of the listed companies. Measures of board of directors employed are size of the board, presence of non-executive directors on the board, presence of independent non-executive directors on the board and CEO/Chair duality. Results reveal that board size and presence of independent non-executive directors on the board have significant, negatively and positively correlation with debt to asset ratio respectively. However corporate capital structure decisions are not found significantly influenced by CEO/Chair duality and the presence of non-executive directors on the board. Consequently based on the results, board of director’s features such as board size and presence of independent non-executive directors on the board play an important role in determination of financial mix of the companies. |
| first_indexed | 2025-11-15T08:33:24Z |
| format | Article |
| id | upm-22837 |
| institution | Universiti Putra Malaysia |
| institution_category | Local University |
| language | English |
| last_indexed | 2025-11-15T08:33:24Z |
| publishDate | 2012 |
| publisher | Canadian Center of Science and Education |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | upm-228372017-10-23T01:38:27Z http://psasir.upm.edu.my/id/eprint/22837/ Board of directors and capital structure: evidence from leading Malaysian companies Teh, Boon Heng Azrbaijani, Shabnam Ong, Tze San Malaysia is one of the rapidly developing economies in South-East Asia which embraces the concept of good corporate governance due to the 1997-1998 Asian financial crises. This study investigates the relationship between board of directors and company’s capital structure in an emerging market, Malaysia. This research paper covers 75 non-financial leading Malaysian companies, which are employed as a price index, listed on Kuala Lumpur stock exchange (KLSE) from the year 2005 to 2008 fiscal years. A multiple regression analysis has been used to examine the linkage between board of director’s features and capital structure decisions of the listed companies. Measures of board of directors employed are size of the board, presence of non-executive directors on the board, presence of independent non-executive directors on the board and CEO/Chair duality. Results reveal that board size and presence of independent non-executive directors on the board have significant, negatively and positively correlation with debt to asset ratio respectively. However corporate capital structure decisions are not found significantly influenced by CEO/Chair duality and the presence of non-executive directors on the board. Consequently based on the results, board of director’s features such as board size and presence of independent non-executive directors on the board play an important role in determination of financial mix of the companies. Canadian Center of Science and Education 2012-03 Article PeerReviewed application/pdf en http://psasir.upm.edu.my/id/eprint/22837/1/22837.pdf Teh, Boon Heng and Azrbaijani, Shabnam and Ong, Tze San (2012) Board of directors and capital structure: evidence from leading Malaysian companies. Asian Social Science, 8 (3). pp. 123-136. ISSN 1911-2017; ESSN: 1911-2025 http://ccsenet.org/journal/index.php/ass/article/view/15384 10.5539/ass.v8n3p123 |
| spellingShingle | Teh, Boon Heng Azrbaijani, Shabnam Ong, Tze San Board of directors and capital structure: evidence from leading Malaysian companies |
| title | Board of directors and capital structure: evidence from leading Malaysian companies |
| title_full | Board of directors and capital structure: evidence from leading Malaysian companies |
| title_fullStr | Board of directors and capital structure: evidence from leading Malaysian companies |
| title_full_unstemmed | Board of directors and capital structure: evidence from leading Malaysian companies |
| title_short | Board of directors and capital structure: evidence from leading Malaysian companies |
| title_sort | board of directors and capital structure: evidence from leading malaysian companies |
| url | http://psasir.upm.edu.my/id/eprint/22837/ http://psasir.upm.edu.my/id/eprint/22837/ http://psasir.upm.edu.my/id/eprint/22837/ http://psasir.upm.edu.my/id/eprint/22837/1/22837.pdf |