Determinants of firm value in the Malaysian property sector: An empirical analysis of firm characteristics

Lim, Yee Chin and Tan, Shee Yang and Tan, Wan Sin and Ten, Hui Shan (2024) Determinants of firm value in the Malaysian property sector: An empirical analysis of firm characteristics. Final Year Project, UTAR.

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Abstract

In the competitive landscape of Malaysia's property sector, maintaining a strong firm value is crucial for attracting investors and ensuring stability. However, there has been a concerning decline in market capitalization from 2017 to 2020, highlighting the need for firms to strategically leverage their controllable characteristics to enhance their value. This study conducts empirical analysis on five key firm characteristics—profitability, capital structure, firm size, investment decisions, and firm growth—and their impact on firm value for publicly listed property firms in Malaysia. This study employs signalling theory to examine how firm characteristics affect firm value. Also, the study used secondary data provided by Refinitiv software focusing on 76 out of 100 property firms listed on Bursa Malaysia for the period from 2005 to 2019. Fixed effect generalized least square model was employed to study the relationship between firm characteristics and firm value. From the empirical results, our findings showed that profitability and firm growth positively influence firm value, while the capital structure, firm size and investment decision negatively influence firm value in Malaysian property sector. This research offers insights for property firms to increase firm value and attract investors by leveraging these firm characteristics effectively

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