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The determinants of the profitability of Malaysian public listed companies

Ulfana Nisa Adlina, , (2015) The determinants of the profitability of Malaysian public listed companies. Masters thesis, Universiti Utara Malaysia.

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Abstract

This study explores the determinants of public listed companies’ profitability in Malaysia during the financial crisis period in 2008. Return on assets (ROA) is used as a measurement for company profitability while for independent variables, the company specifics determinants (internal factor) and macroeconomic determinant (external factor) are used to determine the company profitability. The company specific determinants are size, liquidity, leverage, and sales growth while for macroeconomic determinant, gross domestic product (GDP) is used. This study utilizes a sample of 161 companies listed in Bursa Malaysia for over the period 2001-2012. All sectors are included in this sample except financial sector because their nature of reporting business is different from the ordinary sectors. The data are analyzed using Ordinary Least Squares (OLS) and fixed effects estimation. The findings show that leverage has a negative and significant relationship with the ROA, implying that companies that have low debt ratio will have higher profit. On the other hand, size, liquidity, and sales growth have a positive and significant relationship with the ROA, indicating that, bigger size companies, highly liquid companies, and companies that able to generate higher sales will have more profits. As for macroeconomic determinant GDP and 2008 dummy are not significant, indicating that the profitability of Malaysian public listed companies is not affected by the economic condition and 2008 global financial crisis.

Item Type: Thesis (Masters)
Uncontrolled Keywords: Firm specific determinants, GDP, global financial crisis, company profitability, ROA.
Subjects: H Social Sciences > HG Finance
Divisions: Othman Yeop Abdullah Graduate School of Business
Depositing User: Mr. Badrulsaman Hamid
Date Deposited: 17 Jun 2015 02:28
Last Modified: 14 Apr 2016 04:08
URI: http://etd.uum.edu.my/id/eprint/4662

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