THE RELATIONSHIP OF CAPITAL STRUCTURE TOWARDS FIRMS PERFORMANCE: FOCUSING ON THE TECHNOLOGICAL SECTOR
DOI:
https://doi.org/10.24191/VoA.v17i2.12004Keywords:
Capital Structure, Trade-off Theory, Pecking Order Theory, Firm Performance ROE, DebtAbstract
Capital structure is an important decision towards firm financing when it comes to mixing debt and equity. In addition, capital is the primary resource for the firms. A good decision about the capital can provide maximized returns that ultimately give an impact on the firm’s value and overall operations and growth. Hence, risks and other factors also must be deliberated in determining a good debt or equity financing. The collection of data focuses on the period from 2012 to 2017 which is equivalent to six years. Eleven companies were selected as a sample that contributed to the 66 observations. Model Pool OLS, Random Effect and Fixed Effect were applied in order to investigate the relationship of firm performance in this industry. At the end of the study, LTD, STD and tangibility were found to be statistically insignificant while only firm size was statistically significant and had a positive relationship towards firm performance in the technological sector.
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Copyright (c) 2021 Zuraidah Ahmad, Nur Liyana Mohamed Yousop, Nur ’Asyiqin Ramdhan, Zuraidah Sipon, Ruziah A. Latif, Suzana Hassan, Norhasniza Mohd Hasan Abdullah, Ummi Mariah Ismail
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