Corporate Finance Practices in Malaysia: A Survey Analysis

Abstract

Abstract: This paper discusses some aspects of corporat finance practices in Malaysia ‘based on various surveys done from carly 1990s until 2007. Time-series and cross-sectional analyses are done on the changes in the perceptions of corporate financial managers of ‘Malaysian listed companies and their practices over the years. In particular, the study focuses on capital budgeting. capital structure and dividend policies and practices of the companies. Its found tha in making capital investments, there is a clear indication tha the managers are adopting the right evaluation tools n recent years compared 0 several years. azo. In terms of capital structure practices, Malaysian companies are noted for their long: erm debt aversion, but debt usage is increasing over the years. As for dividends, there are remarkable similarities in dividend behaviour and practices of local firms compared to those in developed markets, despite the differences in dividend tax regime in Malaysia compared to the US. In summary, our corporate managers seem 10 be progressing on a learning curve towards financial polices and practices of developed markets.