The Influence of Asset Growth, Profitability, and Firm Size on The Value of Malaysian Technology Firms

Abstract

This study investigates the financial determinants of firm value measured by Tobin’s Q among publicly listed technology companies on Bursa Malaysia over the ten-year period from 2014 to 2023. Utilizing a balanced panel dataset of Malaysian technology firms, the empirical analysis employs panel correlation and regression techniques (fixed and random effects models) to evaluate the relative influence of profitability, asset growth, and firm size on market valuation. The empirical findings indicate that profitability consistently exerts a positive and statistically significant impact on firm value, demonstrating that operational efficiency, margin quality, and sound earnings performance are the primary drivers of market appreciation. In contrast, asset growth and firm size display complex and non-linear relationships with Tobin’s Q, suggesting that balance-sheet expansion and scale do not automatically yield higher market premiums. Within the capital-intensive and highly volatile environment of Malaysia’s technology and semiconductor sector, these results demonstrate that capital efficiency outweighs pure size. Ultimately, this paper provides crucial empirical insights for corporate managers seeking to optimize capital allocation, investors evaluating tech stock fundamentals, and policymakers designing targeted industry growth strategies.