The Effect of Corporate Characteristics on Capital Structure in Indonesia

Authors

  • Nicko Albart Sekolah Bisnis IPB
  • Bonar Marulitua Sinaga Sekolah Bisnis IPB
  • Perdana Wahyu Santosa YARSI University, Jakarta, Indonesia
  • Trias Andati School of Business IPB University, Bogor, Indonesia

DOI:

https://doi.org/10.14414/jebav.v23i1.2153

Keywords:

Capital structure, company characteristics, ownership, profitability, tangibility

Abstract

This study aims to determine the effect of corporate characteristics on the company's capital structure, which plays a fundamental role in the proportion of debt and equity financing risks. The research method used is purposive sampling. This research's population is non-financial issuers listed on the Indonesia Stock Exchange with quarterly data for the period of 2010-2017. The analysis is performed using panel data with six independent variables and two control variables. The results of this study indicate that profitability and institutional ownership have a negative effect on capital structure. In contrast, market ratios, firm size, and managerial ownership have a positive effect on capital structure. Debt decision making must consider financial and ownership characteristics, especially if there is institutional or government ownership in the company because company characteristics have a significant effect on the company's capital structure.

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Published

2020-07-30

How to Cite

Albart, N., Sinaga, B. M., Santosa, P. W., & Andati, T. (2020). The Effect of Corporate Characteristics on Capital Structure in Indonesia. Journal of Economics, Business, and Accountancy Ventura, 23(1), 46–56. https://doi.org/10.14414/jebav.v23i1.2153