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Vol. 13, Number 1, 2017

Debt Conservatism and Debt-Equity Choices: Evidence from REITs’ Unused Debt Capacity

Woei-Chyuan Wong
Universiti Utara Malaysia, Malaysia

Abstract Ɩ Full Text
We infer debt conservatism behavior by examining how REITs adjust towards their debt capacity following a capital issue or repurchase decision. It is observed that REITs with high unused debt capacity tend to issue equity which renders them more underleveraged for at least two consecutive years. These high debt buffer REITs also tend to converge slowly towards their debt capacity through repurchase decisions and hold significantly higher unused debt facilities than their low buffer counterparts. These findings are robust to a variety of robustness checks and cannot be explained by the traditional pecking order and trade-off theories of capital structure.
Keywords: Capital structure, Financial flexibility, Unused debt capacity, REIT
JEL Classification: G32

Determinants of Attitude Towards Zakat on Employment Income in Nigeria

Abubakar U. Farouk
Kano State Polytechnic, Kano, Nigeria

Kamil Md Idris
(TISSA), Universiti Utara Malaysia, Malaysia

Ram Al Jaffri Saad
(TISSA), Universiti Utara Malaysia, Malaysia

Abstract Ɩ Full Text
The objective of this paper was to empirically examine the influence of perceived capability, perceived government support and religiosity as determinants of attitude towards Zakat in Nigeria. A survey questionnaire was administered on government employees and 343 valid observations were retrieved and analyzed from the survey. The PLS analysis technique was used to assess the measurement model, the structural model as well as the predictive relevance of the model of the study. The outcome of the examination disclosed the appropriateness of the model of the study as well as the analytical tool utilized. The postulated relationships were all supported. Thus, the findings, if utilized in developing policies for strengthening the attitude of employees towards Zakat, will boost Zakat collections, since a positive attitude leads to improved collections. The study establishes the efficacy and the suitability of its model on factors influencing the attitude of employees towards Zakat in Nigeria.
Keywords: Attitude, Capability, Government support, Religiosity, Zakat.
JEL Classification: H27, I38, M41, O55,Z12

Cash Conversion Cycle and Profitability of Nigerian Small and Medium-Sized Entities: An Empirical Analysis

Musa Muhammad Tsagem
Federal College of Education (FCE), Nigeria

Norhani Aripin*
(TISSA-UUM), Universiti Utara Malaysia, Malaysia

Rokiah Ishak
(TISSA-UUM), Universiti Utara Malaysia, Malaysia

Abstract Ɩ Full Text
The aim of this study was to investigate the relationship between cash conversion cycle and firm performance of small and medium-sized entities (SMEs) in Nigeria. SMEs are potentials for Nigerian economy growth; contributing to gross domestic product, employment generation, poverty reduction and industrialization. The study employed the panel data regression analysis using financial data from a sample of 311 Nigerian SMEs for the period 2007-2013. The findings of the study revealed a negative association between cash conversion cycle, inventory holding period and accounts payable period with SMEs profitability; and a statistically significant negative relationship between accounts receivable period and SMEs’ profitability. The findings also found a significant positive relationship between firm size, leverage, growth opportunities and firm age and SMEs’ profitability. Thus, the result of the study indicates that Nigerian SMEs with a shorter cash conversion cycle and low growth opportunities hold more cash. This study contributes to existing literature on the relationship between cash conversion cycle and SMEs’ profitability in developing economies. However, this study is limited to non-financial and non-service SMEs.
Keywords: Cash conversion cycle, Profitability, Accounts receivable period, Inventory holding period, Accounts payable period
JEL Classification: M41, G33, L25

Board Characteristics and Capital Structure of Malaysia Consumer Products Sector

Kuah Yoke Chin
Universiti Tunku Abdul Rahman, Malaysia

Zuriawati Zakaria
Universiti Tunku Abdul Rahman, Malaysia

Abstract Ɩ Full Text
This study investigated the relationship between board characteristics and capital structure, namely total debt, short-term debt, and long-term debt of firms in the Malaysian consumer products sector for the period 2010 to 2014. Based on 109 firms selected for the study, the firms’ decision about capital structure regardless of total debt, short-term debt or long-term debt is not influenced by the size of the board. However, if the board membership constitutes more independent directors, the proportion of short-term debt is even higher than the long term-debt. Board meetings were found to have a significantly negative influence on firms’ decisions concerning total debt financing. The findings also revealed that large firms hold more short-term and long-term debts when there is an increase in the number of members on the board. The firms that have been long in existence focused more on short-term debt financing and their growth in terms of capital expenditure. Consequently, the total debt of the firms also increased.
Keywords: Board size, Board independence, Board meeting, Capital structure.

IPO Research in Malaysia: A Review of Under-Pricing Phenomenon

Ali Albada
Universiti Kebangsaan Malaysia, Malaysia
Othman Yong
Universiti Kebangsaan Malaysia, Malaysia
Abstract Ɩ Full Text
This paper examines the current status of research regarding under-pricing in the Malaysian IPOs. We have divided the review of past studies into the following categories: investor information, the choice of underwriter, ownership structure, share lock-up period, supply of IPOs, mechanism for pricing IPOs, institutional investor involvement, and board structure. We have shown that there is a noticeable decline in initial return over time, perhaps due to the strengthening of the regulatory environment and the ability of investment bankers to adequately manage the listing process of new issues. Furthermore, based on the review of past studies, we have managed to pinpoint significant factors that influenced the initial return in the Malaysian IPO market. Finally, we also provide suggestions for future research.
Keywords:IPOs; Initial public offerings, Malaysian IPOs, Under-pricing of IPOs, Information asymmetry, Determinants of IPO under-pricing. 
JEL Classification: G11, G12, G14, G24, G32

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