ISSN: 2225-8329
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This paper investigates the pattern of capital structure of 4,127 Malaysian companies from 2005 to 2015. We, then specify the sample into two periods, the pre-recession period from 2002 until 2007 and post-recession period from 2009 until 2015, to determine whether there is any significant different in term liabilities between the two periods. For the third objective of this paper, we examine the impact of base lending rate (BLR) in the capital structure between pre- and post-recession periods, indicating the companies drastically change their capital structure after recession occurs. In this paper, we find a sharp downwards movement in long-term debt and total debt after 2008 year of recession. We also document the level of total debt and long-term debt to significantly higher before the recession hit. Interestingly, we find base lending rate to have negative relationship with long-term and total debts only after recession has occurred but not during the economic expansion (pre-recession period), thus supporting the study’s hypotheses.
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In-Text Citation: (Shaari et al., 2022)
To Cite this Article: Shaari, S. N. M., Kamarudin, N. N. A. N., Raman, S. A., & Mahmud, N. M. (2022). The Impact of Base Lending Rate on Capital Structure in Malaysia. International Journal of Academic Research in Accounting Finance and Management Sciences, 12(1), 47–62.
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