The impact of bond market on capital structure determinants among the listed construction firm in Malaysia

Abstract

In Malaysia, the construction sector is one industry that help in improving the economy and also the country's development. The construction sector is related to the success of any economy. On the other hand, it can serve as a kind of economic catalyst for developing and developed economies. It is because this sector plays a very important role in providing a better quality of life and wealth to the country. most contractors do not have sufficient capital, fixed assets and they are usually pretty self-construction equipment from the land or building to finance their businesses. Moreover, banks do not accept these assets as collateral acceptable to move the loan. Because without bank financing, the contractor will clearly find it more difficult to carry out their projects. This study contributes to the existing literature by addressing two important aspects as the body of knowledge and policy implications. Because most of the literature in the past focused on developed countries, this study fills the gap by providing new insights with regard to corporate financing decisions in the context of emerging markets. In addition, capital structure decisions is different because of different characteristics in all sectors. Thus, this study provides new empirical evidence and a better understanding of the capital structure of companies in the construction sector in Malaysia. This study used quantitative research method. A quantitative research is regularly associated with a deductive approach. This study based on secondary data extracted from various sources especially from Malaysia Stock Exchanges starting 2000 until 2015. As of March 2016, there was 36-Construction firms listed on the Burs Malaysia.