Capital Structure and Corporate Performance of Indonesian Building Construction Sub Sector

Authors

  • Ranila Suciati UPN Veteran Jakarta, Jakarta, Indonesia Author

DOI:

https://doi.org/10.61841/j59spc30

Keywords:

Financial Performance,, Capital Structure, Profitability Ratio,, Construction, Building

Abstract

This study aims to determine the effect of Capital structure on the Financial Performance of Indonesian building construction sub sector. This research was conducted with the aim of analyzing capital structure and financial performance during 2015 to 2018 (4 years). For the purpose of this study, data were processed from a sample of annual reports of Indonesian Building Sub Sector companies listed on the Indonesia Stock Exchange. The analytical method used is panel data regression, will reveal the relationship between capital structure and financial performance with a significance level of 0.05. Research results for construction and building sub sector companies in Indonesia The R square value of this model is 0,30 which means that variations of Corporate Performance that can be explained by the independent variables analyzed are DER, DAR, and LTDC by 30.02 percent and the remaining 69.98 percent explained by other factors not included in this study.

 

Downloads

Download data is not yet available.

References

1. Abor, J. (2005). The effect of capital structure on profitability: an empirical analysis of listed firms in Ghana. Journal of Risk Finance, 6(5), 438–445. https://doi.org/10.1108/15265940510633505

2. Arbabiyan, A.-A., & Safari, M. (2009). The effects of capital structure and profitability in the listed firms in Tehran Stock Exchange. Journal of Management Perspective, 33(12), 159–175.

3. Barbosa, N., & Louri, H. (2005). Corporate performance: Does ownership matter? A comparison of foreign- and domestic-owned firms in Greece and Portugal. Review of Industrial Organization, 27(1), 73–

102. https://doi.org/10.1007/s11151-005-4920-y

4. Baskin, J. (1989). An empirical investigation of the pecking order hypothesis. Financial Management, 26–35.

5. Berger, A. N., & Bonaccorsi di Patti, E. (2006). Capital structure and firm performance: A new approach to testing agency theory and an application to the banking industry. Journal of Banking and Finance, 30(4), 1065–1102. https://doi.org/10.1016/j.jbankfin.2005.05.015

6. Bodhanwala, R. J. (2014). Testing the Efficiency of Price-Earnings Ratio in Constructing Portfolio. IUP Journal of Applied Finance, 20(3).

7. Champion, D. (1999). Finance: the joy of leverage. Harvard Business Review, 77(4), 19–22.

8. Ghosh, C., Nag, R., & Sirmans, C. F. (2000). The pricing of seasoned equity offerings: evidence from REITs. Real Estate Economics, 28(3), 363–384.

9. Hadlock, C. J., & James, C. M. (2002). Do banks provide financial slack? Journal of Finance, 57(3), 1383–1419. https://doi.org/10.1111/1540-6261.00464

10. Hasan, M. B., Ahsan, A. F. M. M., Rahaman, M. A., & Alam, M. N. (2014). Influence of Capital Structure on Firm Performance: Evidence from Bangladesh. International Journal of Business and Management,

9(5), 184–194. https://doi.org/10.5539/ijbm.v9n5p184

11. Meero, A. A. (2015). The Relationship between Capital Structure and Performance in Gulf Countries Banks: A Comparative Study between Islamic Banks and Conventional Banks. International Journal of Economics and Finance, 7(12), 140. https://doi.org/10.5539/ijef.v7n12p140

12. Modigliani, F., & Miller, M. H. (1963). Corporate income taxes and the cost of capital: a correction. The American Economic Review, 53(3), 433–443.

13. 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.

14. Roden, D. M., & Lewellen, W. G. (1995). Silver Anniversary Commemoration (Summer, 1995).

Management, 24(2), 76–87.

15. Saad, N. M. (2010). Corporate Governance Compliance and the Effects To Capital Structure in Malaysia.

International Journal of Economics and Finance, 2(1), 105–114. https://doi.org/10.5539/ijef.v2n1p105

Downloads

Published

30.06.2020

How to Cite

Suciati, R. (2020). Capital Structure and Corporate Performance of Indonesian Building Construction Sub Sector. International Journal of Psychosocial Rehabilitation, 24(6), 1956-1967. https://doi.org/10.61841/j59spc30