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The main objective of this paper is to examine whether firm´s size, growth opportunity, and firm´s reputation affect the debt level (leverage) of the construction companies in Malaysia. The study uses the data from ten selected Malaysia´s construction companies for the period from 2001 until 2008. Using the panel data technique, the estimation results show that size of construction companies has a strong significant positive relationship to the firm´s leverage. The finding is consistent with the previous findings that firm´s size adds huge information in explaining the level of debt. The results also suggest that company´s leverage is positively affected by firm´s reputation. On the other hand, growth opportunity has inverse relationship with leverage, indicating that high leverage would retard the growth of firms.

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Zahariah Sahudin, Masters in Business Administration (Uni.Teknologi MARA, Msia). Lecturer of Univ. Teknologi MARA. Faridah Pardi, Masters in Economics (Uni. Kebangsaan Malaysia, Msia. Lecturer of Univ. Teknologi MARA. Anidah Aziz, Masters in Business Administation (Uni.Kebangsaan Malaysia, Msia). Lecturer of Univ. Teknologi MARA.

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