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• DETERMINANTS OF RETURN ON ASSETS OF NON-FINANCIAL FIRM OF MALAYSIA

  Hussain Tahir(IUMW Business School, International University of Malaya-wales, Kuala Lumpur, MALAYSIA ),
  Sarfraz Hussain(Azman Hashim International Business School, Universiti Teknologi Malaysia, MALAYSIA ),
  Anam Iqbal, Ejaz Aslam (IIUM Institute of Islamic Banking and Finance School, International Islamic University Malaysia, MALAYSIA),
  Ridzuan Masri (School of Management and Business, Manipal International University, MALAYSIA ).
  

  Disciplinary: Management and Financial Sciences.

  ➤ FullText

  DOI: 10.14456/ITJEMAST.2020.215

  Keywords: Financial leverage; Dividend payout policy; Board size; Board diversity; ROA; Fixed effect model; Random effect model; Leverage ratio.

  Abstract
  To identify the determinants of return on assets of non-financial firms, and to examine how firms' different attributes affect the return on assets, this study uses a sample made up of 185 non-financial firms of Malaysia, covering the period 2005-2018. This paper uses ordinary least squire (OLS) and panel regression fixed effect, random effect model simultaneously. The results show the size of the board and board diversity exhibit insignificantly negative relationships with ROA in the Malaysian context, respectively. Financial leverage exhibit significant negatively infuences the Malaysian non-financial arms. The dividend payout exhibit statistically significant and positive relationship with ROA in Malaysian non-financial firms, respectively. It is clearly stated that high ROAs lead the way in making good financial gains in Malaysia. However, board diversity negatively affects the ROA in Malaysian non-financial firm context, because most firms are family-owned. High dividend payout policy increases the ratio of return on assets, high dividend ratio attracts the more investment that upsurges the firm's value and growth. The findings of research have significant policy consequences. The research contributes to the return on assets literature by viewing at the position of return on assets and its determinants in selected non-financial firms of Malaysia.
  

  Paper ID: 11A11K

  Cite this article:

  Tahir, H., Hussain, S., Iqbal, A., Aslam, E., Masri, R. (2020). DETERMINANTS OF RETURN ON ASSETS OF NON-FINANCIAL FIRM OF MALAYSIA. International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies, 11(11), 11A11K, 1-11.