Simultaneous Effect on Debt and Managerial Ownership:  Agency Theory Framework

Akhbar, Taufik

doi:10.24002/kinerja.v21i2.1276

Cited by 2 publications

(3 citation statements)

References 23 publications

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“…Likewise, the resulting tcount is 2.765, with a significant level of 0.015, which means that earning volatility has a significant effect on debt. The results of this study support the research of Wardhana and Tandelilin (2011), Bernice et al (2015), Huq (2016), and Akhbar (2017) which stated that earning volatility have a significant effect on debt so that it can be used as a determinant in corporate debt policy.…”

Section: Discussionsupporting

confidence: 89%

“…This study used several variables, including ownership structuremanagerial ownership and institutional ownership, asset structure, and earning volatility based on the reason that the four variables are the most critical factors that affect the debt policy. Managerial ownership and institutional ownership can influence fundraising through debt or rights issues (Bernice, Nugrahanti, and Mahastanti, 2015;Akhbar, 2017;Hayat, Yu, Wang, and Jebran, 2018). If funding is obtained through debt means the ratio of debt to equity will increase so that it will increase financial risk.…”

Section: Introductionmentioning

confidence: 99%

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The Influence of Ownership Structure, Asset Structure, and Earning Volatility on Debt Policy in Indonesia

Anwar

2019

JASF

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The higher the proportion of debt, the higher the stock price, but at a certain point, the increase in debt will reduce the value of the company because the benefits obtained from the use of debt are smaller than the costs incurred. The purpose of this study is to analyze the influence of ownership structure – managerial ownership and institutional ownership, asset structure, and earning volatility on debt policy. The data used in this study are secondary data in the form of managerial ownership data, institutional ownership, asset structure, earning volatility and debt policy in pharmaceutical companies that go public on the Indonesia Stock Exchange 2013-2017. The statistical method used is the Stepwise Regression, because there is high multicollinearity in managerial ownership variables, institutional ownership, assets structure, earning volatility. Based on the results of the Stepwise Regression shows that the variables entered into the regression model are earning volatility. Other variables such as managerial ownership, institutional ownership, asset structures are not included in the Stepwise Regression so that conclusion is only earning volatility variable that influences the debt policy earning volatility variables that affect debt policy.

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Section: Discussionsupporting

confidence: 89%

Section: Introductionmentioning

confidence: 99%

The Influence of Ownership Structure, Asset Structure, and Earning Volatility on Debt Policy in Indonesia

Anwar

2019

JASF

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“…According to the agency theory, principals can use high leverage levels to prevent agents from acting opportunistically. However, highly leveraged public firms incur greater risks in honoring their financial obligations (Akhbar, 2017).…”

Section: Introductionmentioning

confidence: 99%

The effect of political connections on firms’ performance: The moderating role of leverage

Supatmi

2022

jeb

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This study seeks to examine the impact of political connections on firms’ performance and the moderating role of leverage on this causal relationship. As an emerging country, Indonesia offers an interesting research setting for this research. Our sample is 471 Indonesian publicly listed firms in 2014–2017, yielding 1,884 firm-year observations. This study uses two indicators as the proxies for firms’ performance: accounting (ROA) and market performance (Tobins’Q). We operationalize political connections with the number of politically connected officials in a firm. Leveraged is measured by dividing total liabilities by total assets at the end of the year. Based on the panel data regression test, our results demonstrate that political connections decrease firms’ market and accounting performance. Further, the results empirically show that leverage strengthens the effect of political connections on firms’ performance. This study contributes to the literature by adding empirical evidence on applying the agency theory to investigate the impact of political connections on firm performance in an emerging country like Indonesia. Furthermore, Indonesia’s multi-party political system offers a research context distinct from other countries.

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Simultaneous Effect on Debt and Managerial Ownership: Agency Theory Framework

Cited by 2 publications

References 23 publications

The Influence of Ownership Structure, Asset Structure, and Earning Volatility on Debt Policy in Indonesia

The Influence of Ownership Structure, Asset Structure, and Earning Volatility on Debt Policy in Indonesia

The effect of political connections on firms’ performance: The moderating role of leverage

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