Determinants of Capital Structure: A Conceptual Understanding of Oil and Gas Firms in Malaysia

Universiti Teknologi Petronas, Department of Management and Humanities, 32610, Bander Seri Iskander, Perak, Malaysia

^* Corresponding author: hana_16005304@utp.edu.my

Abstract

Since the introduction of Modigliani and Miller’s (1958) proposition of irrelevance capital structure principle, a wide debate on capital structure has emerged. The literature on the topic has been studied intensively as they are increasingly recognized as the central of the corporate finance field. In addition, an in-depth study focusing on the determinants of capital structure has also increased as it acts as an important indicator for the firms in making capital structure decision. However, the results remain inconclusive making the determinants of capital structure not clearly understood, thus suggesting a need for further studies. Therefore, the aim of this study is to discuss the relationship of determinants of capital structure, specifically among oil and gas firms in Malaysia. The findings of this study will increase the understanding of the phenomena, thus assisting researchers in conducting further studies and guiding decision makers in making capital structure decision.