Determining the financial performance factors among Bumiputera entrepreneurs in Malaysian construction industry

Abstract

This study aims to identify the financial factors determining the success or failure of contracting firms in the Malaysian construction industry. Researchers in the construction industry have addressed three main factors that have caused the failure of contracting firms in their operations, namely, shortage of funds, low profits, and debt. Previous literature indicates that the rate of failure among construction firms is higher than that in other sectors. The methodology employs the quantitative approach to achieve its objective. The study mailed 250 questionnaires to selected contracting firms. The results showed that the negative reputation of failed contracting firms are influenced by ten factors, including increased prices of raw materials during construction, low contract price, projects not completed within the agreed time, small capital, delayed deposit from clients, relying on creditors to fund projects, difficulty in acquiring loans, delay in receiving progress payments, exorbitant financial costs, and small capital. These ten main factors are drawn from three main categories, namely, small profit, shortage of capital, and debt burden.