The Determinants of Capital Structure of Listed Retailing Sector Companies on Indonesia Stock Exchange (IDX)

Abstract

Introduction. Capital structure must be the concern of the company's financial managers in expanding and financing the company's operations. The financing decisions that will be used must have strong implications for the value of the company in the future. The data used in this study were secondary data obtained from the Indonesia Stock Exchange website and from the HOTS PT application. Mirae Aset Sekuritas as well as from the official website of each company in the researched samples. The researched population was listed retail ing sector companies on the Indonesia Stock Exchange (IDX) over the period of 2012-2016. The number of companies used was 18. The data analysis used panel data regression on the fixed effect assumption. Purpose. The purpose of this study was to conduct an analysis and obtain empirical evidence of the effect of the Profitability, Tangibility, Firm Size, Growth Opportunity, Liquidity, Business Risk and Non-Debt Tax Shield variables on the capital structure. Results. The results of the study showed that the capital structure (leverage) was influenced by variables of profitability, firm size, liquidity and non debt tax shields (NDTS). Variables of assets tangibility, growth opportunity and business risk did not affect the leverage. Conclusion. The company finance managers should prioritize the internal funding sources and need to be thoroughly in utilizing external funding. The results of the analysis showed that the Pecking Order (POT) theory was more influential than the Trade-Off (TOT) theory. Internal financing sources were preferred to avoid high loan interest rates in Indonesia, foreign exchange risk losses for loans in foreign currencies, government regulations that limit the amount of interest costs that can be charged as tax deduction fees and the Indones ian economy which is vulnerable to global influences.

Characteristics of the Board of Directors and Corporate Financial Performance—Empirical Evidence

“…Research results show that financial leverage has a negative impact on business performance of enterprises, showing that an increase in financial leverage will reduce business performance. The results of this study are quite similar to many other studies, such as Sudharika et al (2018) at Colombo Stock Exchange (CSE) and Nassar (2016) conducted at Istanbul Stock Exchange (ISE), who believed that businesses should seek funding through their own capital and should not be too dependent on external financing, as this is likely to bring high risks and reduce the financial performance of the company.…”

“…Studies show that other factors also have an influence on corporate financial performance. Sudharika et al (2018) researched the Colombo Stock Exchange (CSE) over a 5-year period from 2012-2017; they used the total debt-to-equity ratio to measure capital structure and argued that capital structure has a negative impact on the financial performance of the firm. Nassar (2016) conducted research at 136 industrial companies listed on the Istanbul Stock Exchange (ISE) over a period of 8 years from 2005 to 2012, and also confirmed a significant negative relationship between capital structure and business performance.…”

Pengaruh Struktur Aset, Risiko Bisnis, dan Pertumbuhan Penjualan Terhadap Struktur Modal Dengan Profitabilitas Sebagai Variabel Moderating

“…Hasil penelitian ini selaras dengan penelitian yang dilakukan oleh Hartati dan Mukhibad (2018), Mufidah, Ulupui dan Prihatni, (2018), Sutarka dan Hanafi (2018), Ridho (2019) yang memperoleh hasil bahwa risiko bisnis tidak memiliki pengaruh yang signifikan terhadap struktur modal. Namun tidak mendukung hasil dari penelitian yang dilakukan oleh Buana dan Khafid (2018), Cahyani dan Isbanah (2019), Wardani dan Subowo (2020) dengan hasil yang menunjukkan bahwa risiko bisnis memiliki pengaruh yang negatif dan signifikan terhadap struktur modal serta penelitian yang dilakukan oleh Fitriani, Mardi dan Indriani (2014), Sari (2016) dan Almanaseer (2019) dengan hasil bahwa risiko bisnis memiliki pengaruh positif dan signifikan terhadap struktur modal.…”