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Abstract
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The study finds that profitability, growth opportunities, non-debt tax shields, firm
size, GDP growth and inflation for all six sectors, namely industrial product, services,
technology, property, construction and plantation indicates varying degree of
influences in different sectors.
Firm size indicates a significant result for all sectors, whereas GDP growth and
inflation indicates insignificant relationship for all six sectors, growth opportunities
and NDTS shows insignificant relationship for four sector, except services,
technology and property sector. For profitability, there are three sectors indicate
significant results, namely industrial product, services and technology sector.
Therefore this study is concluded that profitability, growth opportunities, non-debt
tax shields and firm size do assert influence on leverage ratio. It is consistent with
agency cost theory, pecking order theory and trade-off theory.
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