Fundamental Factors and Capital Behavior of Banking in Indonesia

Sangadah, Dhurotus

doi:10.22225/jj.9.2.2022.154-164

Cited by 2 publications

(2 citation statements)

References 15 publications

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“…According to the Sangadah (2022) The debt to equity ratio can describe the sources of funds used by the company and the risks faced by the company. The greater the debt to equity ratio means the greater the company's assets or funding that comes from debt, so that the role of capital will act to overcome this problem, therefore the buffer is negative.…”

Section: Resultsmentioning

confidence: 99%

Capital Structure: Capital Buffer, Return on Equity, Capital Adequacy Ratio in Go-Public Banking in Indonesia

Wahyudin,

Widiyanti,

Andriana

et al. 2024

jss

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Banking companies may be faced with adjustment costs (cost of capital adjustment) to obtain optimal capital ratios. These costs arise when banks increase or obtain new external capital so that capital adjustments can lead to excess or shortage of capital which can have a negative impact and cause banks to be reluctant to react quickly when capital shocks occur. This research explores the most significant factors that influence bank capital policy choices in Indonesia. This study examines the financing choices of 8 banks for the 2013-2022 period using panel data regression analysis techniques with STATA.17. The results of the Random Effect Model Estimation research where bank companies in Indonesia have high leverage support the fact that the nature of bank business is different from non-banking companies. The significant negative relationship of the capital buffer is in line with the too big fail theory, packing order theory and agency theory, as well as the Retrun On Equity and Capital Adequancy Ratio variables which have a significant positive relationship at an accuracy level of 85.01%, so in other words banking companies can use debt to finance the company on the basis of agency or managerial policies and strategies, thereby proposing pecking order theory with the assumption that there is information asymmetry and agency costs that are relevant both in the long term.

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Section: Resultsmentioning

confidence: 99%

Capital Structure: Capital Buffer, Return on Equity, Capital Adequacy Ratio in Go-Public Banking in Indonesia

Wahyudin,

Widiyanti,

Andriana

et al. 2024

jss

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“…Panel data analysis uses STATA V.17, with leverage as the dependent variable and various financial and macroeconomic indicators as independent variables. The research adopts existing variable definitions from the literature for meaningful comparisons (Le & Ngo, 2020;Leary & Roberts, 2010;Levin et al, 2002;Sangadah, 2022).…”

Section: Methodsmentioning

confidence: 99%

Cultural determinants of capital structure in Indonesian banking

Saleh,

Isnurhadi,

Malinda

et al. 2024

irjmis

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Capital structure decisions play a crucial role in shaping the financial landscape of companies, especially in developing countries. This study examines the cultural determinants of capital structure in Indonesian banking within the macroeconomic context from 2013 to 2022. The capital structure represents the mix of various company funding methods, impacting its value and influencing stakeholders. The debate on how the interplay of debt and assets affects a company's value continues, with the determining factors of capital structure still being explored in financial studies. Using STATA V.17, this research analyzes 30 banking companies listed on the Indonesia Stock Exchange, with leverage as the dependent variable. Financial ratios, including liquidity ratio, profit volatility, growth opportunities, bank size, and external macroeconomic variables such as inflation and Gross Domestic Product (GDP), are examined as potential influencers on the capital structure. The results reveal high leverage in Indonesian banks, with variations in financial approaches. Return on assets, growth opportunities, and inflation exhibit a positive and significant relationship with leverage, while profit volatility, tangibility, bank size, and GDP show a negative and significant relationship. The research suggests limitations in scope, recommending including all Indonesian banking companies and additional external macroeconomic variables like exchange and interest rates.

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Fundamental Factors and Capital Behavior of Banking in Indonesia

Cited by 2 publications

References 15 publications

Capital Structure: Capital Buffer, Return on Equity, Capital Adequacy Ratio in Go-Public Banking in Indonesia

Capital Structure: Capital Buffer, Return on Equity, Capital Adequacy Ratio in Go-Public Banking in Indonesia

Cultural determinants of capital structure in Indonesian banking

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