該研究調查 196 馬來西亞上市公司財政緊縮的問題。調查結果顯示，馬來 西亞企業的投資，一般不會面臨財政限制。然而，公司的大股東將降低企業使 用外部融資於投資，並側重於內部現金流用。相反的，三名大股東聯盟的影響， 能減少企業使用內部現金流於投資的依賴。此外，衡量董事的報酬激勵比卻能 激勵企業使用內部現金流及外部債務融資，以加速投資。

The study investigates the issues of financial constraints in Malaysia. Using a sample of 196 Malaysian public listed firms, the findings show that generally firms do not face financial constraints in Malaysia. However, the presence of large shareholder reduces the use of external financing and emphasis on internal cash flow for firms’ investment. The coalition effects of top three large shareholders are found to reduce the dependence on internal cash flow for investment. Moreover, directors’ compensation measured as incentive ratio is found to accelerate investments through internal cash flow and external debt financing.

The issue of financial constraints may cause firms be denied a profitable investment due to inaccessible external capital markets. Two views prevail in the study: the asymmetric information hypothesis and the managerial discretion hypothesis. The seriousness of information asymmetry is associated with corporate ownership and control, while managerial descrition can be explained through executive compensations. The issues of asymetric information caused by large shareholders corresponding to the rules of public listing in capital markets, while managerial discretions relate to firms’ policy on executive compensation. In order to protect large shareholders’ private interest, the presence of largest shareholder reduces the use of external financing to avoid monitoring from external and emphasises on internal cash flow for firms’ investment. This implies that information asymmetry become severe in the financial market and will further render the efficiency of external capital market in allocating capital to firms. The prevalence of large shareholders therefore affects the liquidity of debt and equity market. On the other hand, the coalitions of large shareholders could enhance equality of seeking financing through internal cash flows and external capital market. The rules of corporate control that allow a large shareholder to control a firm up to maximum of 75% of controlling stake deprive the efficiency of financial market. Thus, it is important that the ceiling of corporate control in the emerging market to be reduced so that there are more large shareholders in a firm. The presence of a few large shareholders could counter monitor each member and reduce the chances of large shareholders to misappropriate the internal resources for their personal benefits. The coalition is therefore enhancing the quality of corporate governance in firms. More effective decision-making can be made on capital financing and ensure profitable investment that could lead to an efficient investment that could enhance shareholders’ value. Executive compensation based on firms’ basic salary and bonus which are related to firms’ size and complexities of responsibility are not sufficient to ensure firms growth in terms of investments. Long-term compensation horizon, the association of salaries, bonuses and shares are important for directors’ decision on financing and investments. The positive relationship from the finding indicates that investment could enhance the share value, which benefits directors directly. Moreover, long-term compensation horizons enhance the application of capital financing from firms’ internal cash flow and external capital market. Hence, in addition to firms’ basic salary and bonus which are related to firms’ size and complexities of responsibility, equity compensation emphasises long term duration which aim to address the problem of risk aversion behaviour should also be emphasised. Apparently, equity compensation emphasises pay for performance and incentivises them to invest for long-term value because an increase in the equity value will increase dollar per dollar pay out of executives’ ownership.