Financing Preferences and Capital Structure Among Successful Malaysian SMEs

The increasing importance of economic contributions of small and medium-sized sized enterprises (SMEs) around the world, especially in developing countries, motivated a better understanding of financial practices among SMEs. Financial support is among the factors affecting the success of SMEs. However, studies on the financial practices among successful SMEs in Malaysia are still limited. An understanding of the financial practices of this particular group of SMEs is essential in developing a supportive financial framework to achieve national agenda for improving SMEs sustainability and increasing the overall SMEs’ contributions to the Malaysian economy. This research investigates the financial practices among successful SMEs in Malaysia based on the list of Enterprise 50 award winners from 1998 to 2010. This specific database was chosen to serve the objective of this study. Investigations into SME managers’ level of preferences for various sources of financing, and their firms’ capital structure, are the main scope of financial practices under study. Electronic surveys among 444 SMEs were conducted with 120 responses, yielding a response rate of 29.6%. The results of analyses revealed that retained earnings and banking institutions were the most preferred sources of internal and external financing among SMEs managers. Generally, successful SMEs depend more on debt over equity-sources of financing with Debt-to-Equity ratio (DER) of 57 to 43. Furthermore, managers’ ownership status, highest level of education and level of experience are found to have a statistically significant association with their level of financing preferences. On the other hand, non-debt tax shields, tangibility and liquidity were found to have a statistically significant relationship with a firm’s capital structure. Managers’ levels of financing preferences were also found to be significantly associated with the proportion of their firm’s capital structure. Multivariate analyses revealed that managers’ levels of financing preferences were explained by their ownership status, highest level of education and level of experience, while the proportions of a firm’s capital structure are significantly explained by the manager’s levels of financing preferences. Finally, firms’ capital structures were found to be influenced by non-debt tax shields, tangibility and liquidity. This research enhances the existing body of knowledge of the financial practices of successful SME in Malaysia, by providing information on managers’ level of financing preferences and firms’ capital structure. This is the first study to focus on investigating the level of financing preferences among managers of SMEs in Malaysia. In addition, the firm’s capital structure was also investigated. This new knowledge will improve understanding and will enable further enhancement of knowledge in this area of financial practices among successful small businesses, in general, and particularly in the case of Malaysian SMEs

A uniform supply chain management framework for oil and gas sector: a preliminary review

The multidisciplinary nature of the oil and gas sector makes Supply Chain Management (SCM) practices in this sector more complex. Moreover, lack of generic model/framework results in lack of sharing knowledge, training, proper model or framework, and add additional complexities to SCM in oil and gas sector. Furthermore, the SCM knowledge of oil and gas sector is scattered in internet, books, thesis, journals papers, conference’s papers, online database, and organizations. It lacks the obvious structure to unify, facilitate, reuse, and manage that scattered knowledge. Thus, it receives little attention from researchers. Current researchers have not focused on fundamental and essential guidelines to establish a baseline for SCM in oil and gas sector. This paper identifies and proposes common SCM practices concepts in oil and gas sector to unify the view of SCM practices in the form of a conceptual framework that can be seen as a baseline for this domain. The framework will be validated and refined to assist as a representational layer to unify, facilitate, and expedite the access to SCM practices in oil and gas sector. The specific aims are to facilitate knowledge sharing, combinin

The relationship between working youth characteristics and financial capability

There is a widespread interest in raising the levels of financial capability due to the soaring of indebtness among youth in both developed and developing countries. The issue is even more critical among working youth due to their early career life financial commitments. Thus this paper aims to shed light on the level of financial capability among working youth and the relationships between working youth characteristics and financial capability. A questionnaire survey was disseminated to 500 Malaysian working youth between 18 to 40 years old. Based on the 200 completed responses the study reveals that there is an adequate level of financial capability among respondents. Marital status, age, level of income, employment status, living arrangement, number of credit card and financial behavior are found to have significant relationships with financial capability. A further test shows that youth financial literacy and saving behavior have significant effects on financial capability. This study contributes new empirical evidence on financial capability and its association with working youth characteristics. As such this study provides some interesting clues to financial capability among working youth

The deployment of performance measurement system under the supply chain management environment: the case of Malaysian manufacturing companies

Performance measurement system in supply chain management (SCM) has been receiving increasing attention by business organizations as a way to evaluate efficiency in supply chain activities. Assessing the performance of supply chain uncovers the gap between planning and actual performance as to trace the potential problems thus ascertain necessary areas for improvement. This research aims to investigate the application of performance measurement system in SCM as well as exploring its relationship with organization’s performance among Malaysian manufacturing firms. By utilizing the questionnaire method, respondents involved were requested to indicate the extent to which they use a number of 24 selected performance measures that are related to SCM. The results show that the majority of the observed manufacturing firms utilize specific performance measurement tools in evaluating the supply chain performance. The current performance measurement techniques, the Balanced Score Card is adopted by around a quarter of the total responding firms followed by Supply Chain Operations References Model – SCOR, which attracts total users of only a fifth of the total respondents. In particular, performance measures under customer service category recorded the highest number of usage followed by cost-based performance measures and operations management. The results of this investigation also unveil few major points that are important to be highlighted. Firstly, the obtained outcomes of this study bring to light the significant relationships between the utilization of supply chain performance measures under customer service, operations management and organizational performance. In addition, this study discovered a significant correlation between the size of the organization and the extent of use of supply chain performance measures and how these two variables positively correlated. Lastly, the findings also suggested that the performance measures for SCM has been playing a crucial role in enhancing the performance of the organizations and is increasingly operated as the firms grow in size. Based on the brief highlighted points listed above, it is not an exaggeration to say that this research contributes new information to the body of knowledge in performance measurement system in SCM and its associations with organizational performance

Evaluating the Customer Satisfaction’s Effect on Murabahah and Mudarabah Financing in Islamic Banking

There are a considerable number of studies on the service quality dimensions of banking industries, but little researches were carried out on the product quality dimensions, and this led to the minimal understanding of the impact of product quality dimensions from the customers’ standpoints, This research sought to identify the impact Islamic banking products (Murabahah and Mudarabah) dimensions on customer satisfaction. The study surveyed Islamic bank customers (users of the Islamic bank’s products in Nigeria) using questionnaires to seek responses, a convenient sampling technique was conducted to reach out to customers, and the use of PLS-SEM 3 was employed for the analysis of the data. The result model shows an R2 value of 0.414 (for Murabahah), which means 41% of the variance in customer satisfaction is explained by the exogenous constructs of perceived quality, cost, convenience and compliance of Murabahah, and R2 value of 0.309 (for Mudarabah) which means 31% of the variance in customer satisfaction is explained by the exogenous constructs of perceived quality, cost, convenience and compliance of Mudarabah. The values of R2 for Murabahah and Mudarabah show that the constructs were moderate in determining the satisfaction level of customers as they produced 0.414 and 0.309 respectively

Factors influencing online banking adoption: the case of academicians in Malaysian technical University network (MTUN)

Advancement of technology saw the evolution of how banking activities being conducted. Online banking for example, has created new approach of banking activities around the globe. This study was conducted to investigate and determine factors influencing online banking adoption among academicians in Malaysia. The selection of factors was developed based on extended Technology Acceptance Model (TAM). TAM is the most widely applied model in the field of technology adoption. TAM investigates the adoption of technology based on its Perceived Usefulness and Perceived Ease of Use. Government support was included as an extension of the original model mainly because of its direct influence on the existence of the online banking itself. These factors were categorized as the independent variables in this study while online banking adoption as the dependent variable. Data for this research were collected from survey questionnaires, distributed to the target population of academicians at four higher education institutions listed under Malaysian Technical University Network (MTUN) in Malaysia. Data collected were analyzed using Statistical Package for Social Science (SPSS) software. Correlation and regression technique was employed to study factors influencing online banking adoption among respondents, Results of the analysis shows that Perceived Usefulness and Perceived Ease of Use found to be significant factors while Government Support is found to be not a significant factor in influencing the adoption of online banking among the respondents. This study has shed new knowledge for the research in the area of technology adoption particularly in Malaysia

The effect of wadiah product quality attributes on customer satisfaction: the case of Jaiz Bank Nigeria Plc

Islamic banks offer services based on the dictates of Shari’ah law, which advocates for the system of banking void of oppression of any of the contracting parties through the abolition of interest (Ribaa). This study aims at investigating the level of customer satisfaction on one of the Islamic bank products (Wadi’ah) and to examine the relationship between the product’s characteristics and customer satisfaction. The study adopted the Kano theory of customer satisfaction using four characteristics of the products (perceived quality, Cost, Convenience and Compliance). The quantitative technique of data collection was adopted using a questionnaire to gather information from the customers of the Islamic bank, and Partial Least Square (PLS-SEM) was used in the data analysis. The results show that the satisfaction level of perceived quality of Wadi’ah product was found to be moderate, and the cost of maintaining Wadiah account has its satisfaction level as high, the result also show that customers were satisfied in using the Wadi’ah product with convenience, and in the case of compliance, the customers were satisfied that the activities in Wadiah were in line with the principles of Shari’ah

Factors influencing the adoption of online banking services in Malaysia

Online banking is an electronic payment system that allows customers to conduct financial transaction on a website. However, there are some factors that influencing an individual’s choices on the adoption of online banking services. The objectives of this is to identify the level of online banking adoption and factors influencing the adoption of online banking among Malaysians. The study was based on Technology Acceptance Model (TAM) which has been extended with the inclusion of perceived risks as one of the independent variable. Cluster sampling technique was chosen involving three main villages in Rengam, Johor which are New Village, Taman Sri Jaya and Taman Senda. Self-administered survey with the use of closeended questionnaire was applied in study involving a total of 357 target respondents. A total of 244 questionnaires were returned. Out of this, 237 questionnaires were usable with a response rate of 66.4%. Data was analysed by using Statistical Package for Social Science (SPSS). Findings showed that the level of online banking services adoption is quite low among respondents and all three factors have a significant influence on the level of adoption of online banking among respondent

The Effect of Non-financial Performance Measurement System on Firm Performance

Non-financial performance measurement systems have emerged as a results of the growing use of modern manufacturing practices where it is able to improve crucial activities for performance improvement. This research examines the effect of the NFPMSs on firm performance within Malaysian manufacturing firms using a survey questionnaire.  Based on 118 useable questionnaires, the results demonstrate that there are high extent of use of NFPMSs related to internal efficiency, product development & growth and corporate social responsibility. Furthermore the data provide support as to the effect of NFPMSs on firm performance within a manufacturing environment. Therefore the finding ascertains that NFPMSs play significant roles in the production and operations environment especially for increasing the performance of the firm. Keywords: Non-financial performance measurement, manufacturing firms, performance JEL Classifications: M1; M1

Multidimensional performance measures and factors and their linkage with performance

Purpose – This study investigates the extent to which performance measures (PMs) are used, the relationship between multidimensional PMs and firm performance and the factors related to firms’ PM use. Design/methodology/approach – The authors surveyed a sample of Malaysian manufacturing firms. Participants responded to a questionnaire indicating their use of PMs, firm performance, level of managerial commitment, degree of environmental uncertainty and firm’s use of technology. Findings – The results indicate a high degree of PM use related to financial indicators, internal efficiency and customer-related metrics. The results also demonstrate that firm performance has significant positive relationships with use of PMs related to quality and customers, efficiency, innovativeness and social responsibility, as well as comprehensive PM use. Industry variation, firm size, technology use and environmental uncertainty are also significantly related to PM use. Practical implications – Performance measurement systems (PMSs) are an important tool for improving organisational strategy in rapidly changing markets. These findings underscore the significant role of PMSs in manufacturing firms’ performance, including emerging economies. The results suggest that individual PMS approaches should align with each firm’s evolving needs and the characteristics of the sector and environment in which each firm operates. Originality/value – This study advances understandings of the contingency approach to PMSs in manufacturing environments