University of Twente Student Theses


Determinants of Capital Structure: Evidence from Listed Indonesian Companies

Adiputro, Ricky Valianto (2015) Determinants of Capital Structure: Evidence from Listed Indonesian Companies.

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Abstract:Capital structure of a company determines its value, based on capital structure theories it can be influenced by several determinants on company, industry, and country level. This paper examines the capital of Indonesian company based on company-level determinants by analyzing 693 firm-year operations. Using Ordinary Least Square regression method, the paper tested which company-level factors of tradeoff and pecking order theories that have influence the capital structure in the country. The result shows that determinants profitability and liquidity both have significant relationships as expected by pecking order theory, while non-debt tax shield did not provide strong relationship, and tangibility and size showed an inversed relationship as tradeoff theory suggested.
Item Type:Essay (Bachelor)
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:85 business administration, organizational science
Programme:International Business Administration BSc (50952)
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