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Political connection and leverage: Some Malaysian evidence
journal contribution
posted on 2012-08-01, 00:00 authored by M A Bliss, Ferdinand GulThis paper extends prior work on the linkage between politically connected (PCON) firms and capital structure in developing countries. Specifically, this paper focuses on the association between Malaysian PCON firms and leverage, and is motivated by the results of Fraser et al. (2006) who report a positive association between leverage and political patronage. Controlling for a potential misspecification in that paper, this study documents that a significant proportion (almost 12%) of the Malaysian PCON firms have negative equity, and builds on the previous paper by providing fresh evidence that market to book ratio is positively associated with leverage, and that borrowing PCON firms have significantly lower ROA compared to non-PCON firms. © 2012.
History
Journal
Journal of banking and financeVolume
36Issue
8Pagination
2344 - 2350Publisher
ElsevierLocation
Amsterdam, The NetherlandsPublisher DOI
ISSN
0378-4266eISSN
1872-6372Language
engPublication classification
C1.1 Refereed article in a scholarly journal; C Journal articleCopyright notice
2012, ElsevierUsage metrics
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