Managerial ownership and company characteristics as determinants of capital structure

A case study of a non-financial company listed on the Indonesia Stock Exchange

DOI

10.2991/978-2-38476-202-6_42How to use a DOI?

Keywords

Capital Structure; Managerial ownership; Company Size; Sales Growth; Profitability

Abstract

The company’s capital structure decision has implications for the company’s performance and sustainability in the future. Many factors influence the decision of the capital structure of the company. However, in Indonesia’s capital market context, managerial ownership and company-specific characteristics may have a special impact on the company’s capital structure decision. This study investigated the effect of managerial ownership and company-specific characteristics on the capital structure of non-financial companies listed on the Indonesia Stock Exchange (IDX). This study used a quantitative approach. Samples were obtained with a purposive sampling method. Sixty-two companies were selected as research samples using the purposive sample method for 2010-2019, bringing 620 observations. Linear regression analysis was used to analyze data with SPSS-26 software. This study shows managerial ownership and profitability negatively and significantly influence capital structure. Company size and sales growth positively and significantly impact the capital structure. However, liquidity did not show a statistically significant effect. These results prove that managerial ownership and company-specific characteristics, i.e., company size, sales growth, and profitability, are essential in determining capital structure decisions as measured by the long-term debt ratio. However, liquidity does not significantly affect the capital structure.

Copyright

© 2023 The Author(s)

Open Access

Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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TY  - CONF
AU  - Bonifasius M. H. Nainggolan
AU  - Surachman Surachman
AU  - Siti Aisjah
AU  - Sumiati Sumiati
PY  - 2024
DA  - 2024/02/15
TI  - Managerial ownership and company characteristics as determinants of capital structure
BT  - Proceedings of the International Conference on Applied Science and Technology on Social Science 2023 (iCAST-SS 2023)
PB  - Atlantis Press
SP  - 307
EP  - 313
SN  - 2352-5398
UR  - https://doi.org/10.2991/978-2-38476-202-6_42
DO  - 10.2991/978-2-38476-202-6_42
ID  - Nainggolan2024
ER  -