THE EFFECT OF DEBT FINANCING ON FIRM PERFORMANCE OF PUBLIC LISTED CONSTRUCTION FIRMS IN MALAYSIA

Nurul Syuhada, Zaidi and Sheldon Sze Sheng, Lee (2022) THE EFFECT OF DEBT FINANCING ON FIRM PERFORMANCE OF PUBLIC LISTED CONSTRUCTION FIRMS IN MALAYSIA. In: 10th International Borneo Business Conference. #IBBC2022, 19-21 September 2021, Raia Hotel & Convention Centre Kuching, Sarawak.

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Abstract

The purpose of this research is to investigate the impact of debt financing on the performance of Malaysian publicly listed construction firms. The study's data covers the years from 2016 to 2020. This research includes return on asset as the dependent variable and short-term debt, long-term debt, tangibility, sales growth, and business size as the independent variables. This study discovered that short-term debt and tangibility have a significant negative influence on the return on asset of publicly listed construction firms in Malaysia. Long-term debt has an insignificant positive influence on return on asset. Firm size both have a positive impact on return on asset. But sales growth has an insignificant positive relationship with return on asset. According to the result obtained from this study, policymakers, or management of publicly listed construction firms in Malaysia should focus on growing their firm size to attract more investors and opportunities. They should focus on utilizing their existing non-current asset to ensure that it is efficient.

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