EXAMINING THE FACTORS THAT INFLUENCE FIRM PERFORMANCE IN MALAYSIA

Nur Zaireen Ayuni Zaini, Nurul Hana' Saifulldin, Siti Nor Fatimah Zahari, Wan Nur Syamimi, Wan Shaiful Azlan, Ani Asmaa Asli, Nur Azwani Mohamad Azmin

Abstract


This study investigates the internal financial factors that influence firm performance among non-financial listed companies in Malaysia from 2013 to 2023. Using the Resource-Based View (RBV) as the theoretical foundation, the research focuses on four key variables: firm size, sales growth, debt-to-equity ratio, and cash flow ratio. Return on Assets (ROA) serves as the primary measure of firm performance. Data was collected from 30 companies listed on Bursa Malaysia and analyzed using panel data regression techniques, including Pooled OLS, Fixed Effects Model (FEM), and Random Effects Model (REM). Diagnostic tests, including normality, unit root, multicollinearity, and heteroskedasticity, were conducted to ensure robustness. The REM was identified as the most appropriate model based on the Hausman test. Empirical findings revealed that cash flow ratio, debt-to-equity ratio, and sales growth have significant effects on firm performance, while firm size showed an insignificant impact. The results provide critical insights for corporate managers, investors, and policymakers in enhancing financial planning, investment strategies, and policy development aimed at improving firm resilience and profitability, particularly in the context of economic volatility and post-pandemic recovery.

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