Family Firm and Capital Expenditure

DOI

10.2991/aebmr.k.210507.003How to use a DOI?

Keywords

Capital expenditure activity, family ownership, pecking-order theory, agency cost

Abstract

This paper aimed to investigate that the family ownership affects capital expenditure. This phenomenon can be indicated by firm financing, which is related to the sales and cash flow factors. Family ownership aims to defend the capital aggressiveness as reflected by the capital expenditure activity. Data was obtained from public companies listed in the Indonesia Stock Exchange (IDX) in the period of 2014-2016. Data analysis used multiple regression model. The result of this research is that cash flow and family ownership do not influence capital expenditure positively. But for the other variable; sales positively influence capital expenditure. From this result, this paper does not indicate that family ownership finances the capital expenditure more aggressively. The data cannot approve that family ownership can control capital expenditure and also the cash flow variable cannot prove the pecking-order theory. However, sales variable can influence capital expenditure as a base of financing. This phenomenon can support the pecking-order theory. This means that sales variable can finance the capital expenditure, which finally can reduce the agency cost.

Copyright

© 2021, the Authors. Published by Atlantis Press.

Open Access

This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

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TY  - CONF
AU  - Ardiansyah Rasyid
AU  - Viter Pratama
PY  - 2021
DA  - 2021/05/09
TI  - Family Firm and Capital Expenditure
BT  - Proceedings of the Ninth International Conference on Entrepreneurship and Business Management (ICEBM 2020)
PB  - Atlantis Press
SP  - 18
EP  - 23
SN  - 2352-5428
UR  - https://doi.org/10.2991/aebmr.k.210507.003
DO  - 10.2991/aebmr.k.210507.003
ID  - Rasyid2021
ER  -