Tax Efficiency and Capital Structure Dynamics: Unveiling the Drivers of Financial Performance in Malaysia's Telecom Sector

Faiza Saleem

This research investigates the influence of the Effective Tax Rate (ETR) and capital structure (CAPS) on the financial performance (FP) of telecommunications companies listed in Bursa Malaysia. The analysis utilizes a sample of 52 firms data form 2011-2023. The study employs both ordinary least squares (OLS) regression and fixed effect models to investigate the links between effective tax rate (ETR), debt ratio (DR), long-term debt (LTD), asset tangibility (AT), and firm size (FS) in relation to return on assets (ROA). The findings demonstrate that ETR exerts a substantial negative impact on ROA, but DR exhibits a considerable positive correlation. LTD demonstrates a favorable effect on ROA in the OLS model, however it shows a negative effect in the Fixed Effect Model. AT and FS exhibit inconsistent and negligible impacts among models. The results indicate that proficient tax administration and smart loan usage are essential for improving FP in the telecommunications industry. The research underscores the necessity for a sophisticated strategy for long-term financing and the significance of accounting for sector-specific variables. These insights can assist managers and policymakers in making educated decisions to enhance financial results.

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Saleem, F. (2024). Tax Efficiency and Capital Structure Dynamics: Unveiling the Drivers of Financial Performance in Malaysia’s Telecom Sector. International Journal of Academic Research in Accounting, Finance and Management Sciences, 14(4), 234–244.

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Tax Efficiency and Capital Structure Dynamics: Unveiling the Drivers of Financial Performance in Malaysia's Telecom Sector

Faiza Saleem

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