Firm’s Structure and Profitability: An Empirical Evidence from Malaysia Construction Sector
Struktur dan Keuntungan Firma: Bukti Empirik dari Sektor Pembinaan Malaysia
Keywords:
Directors’ Ownership, Profitability, Return on Asset (ROA), Construction SectorAbstract
This study investigates the effect of firm’s internal characteristics on profitability of construction sector in Malaysia for 10 years. A panel data of 38 public listed companies from year 2006 to 2015 has been used. Firm’s profitability as measured by return on asset (ROA) was analyzed against four variables which are firm size, firm age, debt ratio and directors’ ownership. The results were generated using Ordinary Least Square (OLS) method. The empirical finding based on the random effect model (RE) suggests that firm size and debt ratio appear as the important factor affecting profitability. On the other hand, directors’ ownership and firm age has no significant effect on profitability. The finding further reveals that an increase in firm size will increase ROA while an increase in debt ratio will reduce ROA.
Tujuan kajian ini dijalankan adalah untuk mengkaji kesan ciri dalaman syarikat terhadap keuntungan sektor pembinaan di Malaysia untuk 10 tahun. Sebanyak 38 data dari syarikat panel awam digunakan bermula dari tahun 2006 hingga 2015. Keuntungan firma diukur dan dianalisis dengan melihat pulangan atas aset (ROA) terhadap empat pembolehubah iaitu saiz firma, umur teguh, nisbah hutang dan pemilikan pengarah. Analisis dibuat dengan menggunakan kaedah Ordinary Least Square (OLS). Penemuan empirikal berdasarkan model kesan rawak (RE) menunjukkan bahawa saiz firma dan nisbah hutang merupakan faktor penting yang mempengaruhi keuntungan. Sebaliknya, pemilikan pengarah dan umur firma tidak memberi kesan yang signifikan ke atas keuntungan. Dapatan kajian mendapatibahawa peningkatan saiz firma akan meningkatkan ROA sementara peningkatan nisbah hutang akan mengurangkan ROA.
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