Study of financing preferences and capital structure among Malaysian SMEs: evidence from enterprise 50 award winners
Increasing importance of economic contributions of small and medium sized enterprises (SMEs) around the world particularly in developing countries necessitates better understanding of financial practices among SMEs. This research investigates the financial practices among SMEs in Malaysia amon...
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| நிகழà¯à®¨à®¿à®²à¯ˆ அணà¯à®•à®²à¯: | http://eprints.uthm.edu.my/3351/ http://eprints.uthm.edu.my/3351/1/shafie_mohamed_zabri_(FPTP).pdf |
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| தொகà¯à®ªà¯à®ªà¯: | Increasing importance of economic contributions of
small and medium sized enterprises (SMEs) around
the world particularly in developing countries
necessitates better understanding of financial
practices among SMEs. This research investigates
the financial practices among SMEs in Malaysia
among SMEs within the list of Enterprise 50 award
winners from 1998 to 2010, focuses on SMEs
managers’ level of financing preferences towards
available sources of financing, and firm’s capital
structure. Electronic surveys were conducted with a
response rate of 29.5%. SMEs managers are found
to have a higher preference towards debt financing
from banking institutions. Results also show that
the average debt-to-equity ratio among these SMEs
is 57 to 43. Factors affecting manager’s financing
preferences and firm’s capital structure are
investigated through selected manager’s and firm’s
characteristics. Focuses are on the possible
association between these characteristics with
managers’ level of financing preferences and firm’s
capital structure, respectively. The analysis revealed
that manager’s business ownership status and level
of education have a statistically significant
association with their level of financing
preferences. Non-debt tax shields, tangibility of
assets and firm’s level of liquidity, on the other
hand were found to have a statistically significant
relationship with firm’s capital structure. This
research enhances the existing body of knowledge
of financial practices of SMEs, particularly within
the context Malaysian SMEs by providing the
information on manager’s level of financing
preferences and firm’s capital structure. |
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