Determinants of Capital Structure of Multinational Companies (Empirical Study on the Indonesia Stock Exchange)
Downloads
This study aims to provide empirical evidence of the effect of business risk, profitability, asset growth and asset structure on the capital structure of multinational companies on the Indonesia Stock Exchange. The population of this study are manufacturing companies listed on the Indonesia Stock Exchange for the period 2018-2022. The sampling technique uses purposive sampling. Data collection using documentation, secondary data sources in the form of company financial reports. Data analysis using multiple linear regression panel data with the eviuws 13 programme. The results found that business risk affects the capital structure of multinational companies. Profitability affects the capital structure of multinational companies. Asset growth has no effect on the capital structure of multinational companies. Asset structure negatively affects the capital structure of multinational companies. Further research is expected to consider adding other variables that influence the capital structure of multinational companies such as liquidity and tangibility variables. In addition, it is also expected to examine the relationship between independent variables, as well as using different samples and populations from this study.
Akhtar, S. (2005). The Determinants of Capital Structure for Australian Multinational and Domestic Corporations. Australian Journal of Management, 30(2), 321–341.
https://doi.org/10.1177/031289620503000208
Alipour, M., Mohammadi, M. F. S., & Derakhshan, H. (2015). Determinants of capital structure: An empirical study of firms in Iran. International Journal of Law and Management, 57(1), 53–83. https://doi.org/10.1108/IJLMA-01-2013-0004
Amidu, M. (2007). Determinants of capital structure of banks in Ghana: An empirical approach. Baltic Journal of Management, 2(1), 67–79. https://doi.org/10.1108/17465260710720255
Barros, L. A. B. de C., & da Silveira, A. D. M. (2011). Overconfidence, Managerial Optimism and the Determinants of Capital Structure. SSRN Electronic Journal, 1–33.
https://doi.org/10.2139/ssrn.953273
Bunkanwanicha, P., Gupta, J., & Rokhim, R. (2008). Debt and entrenchment: Evidence from Thailand and Indonesia. European Journal of Operational Research, 185(3), 1578–1595.
https://doi.org/10.1016/j.ejor.2006.08.025
Chkir, I. E., & Cosset, J. C. (2001). Diversification strategy and capital structure of multinational corporations. Journal of Multinational Financial Management, 11(1), 17–37.
https://doi.org/10.1016/S1042-444X(00)00040-2
de Jong, A., Kabir, R., & Nguyen, T. T. (2008). Capital structure around the world: The roles of firm- and country-specific determinants. Journal of Banking and Finance, 32(9), 1954–1969. https://doi.org/10.1016/j.jbankfin.2007.12.034
Doukas, J. A., & Pantzalis, C. (2003). Geographic diversification and agency costs of debt of multinational firms. In Journal of Corporate Finance (Vol. 9, Issue 2).
https://doi.org/10.1016/s0929-1199(01)00056-6
Glen, J., & Singh, A. (2004). Comparing capital structures and rates of return in developed and emerging markets. Emerging Markets Review, 5(2), 161–192. https://doi.org/10.1016/j.ememar.2004.01.001
Huang, G., & Song, F. M. (2006). The determinants of capital structure: Evidence from China. China Economic Review, 17(1), 14–36.
https://doi.org/10.1016/j.chieco.2005.02.007
Mangesti Rahayu, S., Suhadak, & Saifi, M. (2020). The reciprocal relationship between profitability and capital structure and its impacts on the corporate values of manufacturing companies in Indonesia. International Journal of Productivity and Performance Management, 69(2), 236–251. https://doi.org/10.1108/IJPPM-05-2018-0196
Mittoo, U. R., & Zhang, Z. (2008). The capital structure of multinational corporations: Canadian versus U.S. evidence. Journal of Corporate Finance, 14(5), 706–720.
https://doi.org/10.1016/j.jcorpfin.2008.09.012
Mukaddam, S., & Sibindi, A. B. (2020). Capital Structure and Financial Performance of Retail Firms : Empirical Evidence from South Africa. Review of Related Literature. Acta Universitatis Danubius, 16(5), 118–143.
Myer, S. C. (1984). The Capital Structure Puzzle. The Journal of Finance, 39(3), 575–592.
Myers, S. C., & Majluf, N. S. (1984). Corporate financing and investment decisions when firms have information that investors do not have. Journal of Financial Economics, 13(2), 187–221. https://doi.org/10.1016/0304-405X(84)90023-0
Pandey, I. M. M. (2005). Capital Structure and the Firm Characterstics: Evidence from an Emerging Market. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.300221
Rajan, R. G., & Zingales, L. (1995). American Finance Association What Do We Know about Capital Structure? Some Evidence from International Data. Source: The Journal of Finance, 50(5), 1421–1460.
Reeb, D. M., Kwok, C. C. Y., & Baek, H. Y. (1998). Risk of the Multinational Corporation. International Business, 29(2), 263–279.
Setyowulan, R., Isnurhadi, Widiyanti, M., & Adam, M. (2020). Business Risk and Sales on the Value of Manufacture Companies With Capital Structure as Intervening Variables in Stock Exchange. International Research Journal of Management, IT & Social Sciences, 7(5), 139–148.
Shah, A., & Hijazi, T. (2004). The determinants of capital structure of stock exchange-listed non-financial firms in Pakistan. Pakistan Development Review, 43(4 II), 605–617.
https://doi.org/10.30541/v43i4iipp.605-618
Sharma, R. K. (2018). Factors affecting financial leveraging for BSE listed real estate development companies in India. Journal of Financial Management of Property and Construction, 23(3), 274–294. https://doi.org/10.1108/JFMPC-01-2017-0002
Singh, M., & Nejadmalayeri, A. (2004). Internationalization, capital structure, and cost of capital: Evidence from French corporations. Journal of Multinational Financial Management, 14(2), 153–169. https://doi.org/10.1016/j.mulfin.2003.07.003
Sofat, R., & Singh, S. (2017). Determinants of capital structure: an empirical study of manufacturing firms in India. International Journal of Law and Management, 59(6), 1029–1045. https://doi.org/10.1108/ijlma-05-2016-0051
Titman, S., & Wessels, R. (1988). The Determinants of Capital Structure Choice. The Journal of Finance, 43(1), 1–19. https://doi.org/10.1111/j.1540-6261.1988.tb02585.x
Viviani, J. L. (2008). Capital structure determinants: An empirical study of French companies in the wine industry. International Journal of Wine Business Research, 20(2), 171–194.
https://doi.org/10.1108/17511060810883786
Zou, H., & Xiao, J. Z. (2006). The financing behaviour of listed Chinese firms. British Accounting Review, 38(3), 239–258. https://doi.org/10.1016/j.bar.2006.04.008
