The Impact of Financial Flexibility and Business Risk on Capital Structure with Firm Size as a Moderating Variable

DOI

10.2991/aebmr.k.220501.048How to use a DOI?

Keywords

Capital structure; financial flexibility; risk; size

Abstract

This study examines the impact of financial flexibility, business risk and moderating effect of firm size on the capital structure of listed manufacturing companies in Indonesia Stock Exchange for 2017 to 2019. The proxies for the financial flexibility are earning to total capital ratio, cash holding, operating cash flow to value ratio, and dividend pay-out ratio. Analysis used panel data regression models and moderated regression analysis (MRA). The results of the study indicate that financial flexibility which is measured by earning to total capital ratio has a negative and significant effect on capital structure. Meanwhile, financial flexibility which is measured by cash holding, operating cashflow to value ratio, and dividend pay-out ratio, have no significant effect on capital structure. Business risk has no significant effect on capital structure as well. Firm size as a moderating variable does not moderate the effect of financial flexibility and business risk on capital structure.

Copyright

© 2022 The Authors. Published by Atlantis Press International B.V.

Open Access

This is an open access article distributed under the CC BY-NC 4.0 license.

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TY  - CONF
AU  - Yanti Yanti
AU  - Emillia Sastra
AU  - Timothy Brian Kurniawan
PY  - 2022
DA  - 2022/05/11
TI  - The Impact of Financial Flexibility and Business Risk on Capital Structure with Firm Size as a Moderating Variable
BT  - Proceedings of the tenth International Conference on Entrepreneurship and Business Management 2021 (ICEBM 2021)
PB  - Atlantis Press
SP  - 314
EP  - 322
SN  - 2352-5428
UR  - https://doi.org/10.2991/aebmr.k.220501.048
DO  - 10.2991/aebmr.k.220501.048
ID  - Yanti2022
ER  -