Macroeconomic Determinants of Corporate Failures in Malaysia

Abd Halim Hamilton Ahmad, Siti Nurazira Mohd Daud, Ainulashikin Marzuki


This research investigates the long-run dynamic linkages between the corporate failures in Malaysia and selected macroeconomic variables by employing the Autoregressive Distributed Lag (ARDL) bound test, a robust and recent time series technique which is applicable irrespective of whether the regressors are I(0) or I(1).  Corporate failure rate is the ex-ante variable in a linear function model with five explanatory macroeconomic variables.  A dummy variable to decipher the corporate failure rates during the Asian financial crisis was also included.  The results show that corporate failure rates in Malaysia are significantly and positively associated with the average lending rate, inflation rate and, gross domestic product (GDP) in the long-run.

Full Text:



International Journal of Business and Management   ISSN 1833-3850 (Print)   ISSN 1833-8119 (Online)

Copyright © Canadian Center of Science and Education

To make sure that you can receive messages from us, please add the '' domain to your e-mail 'safe list'. If you do not receive e-mail in your 'inbox', check your 'bulk mail' or 'junk mail' folders.