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Does Short-Term Debt increase Profitability? The Role of Corporate Governance as a Moderating Variable

Widuri, Retnaningtyas and Darmasaputra, Alan and Cecilia, Agnes (2022) Does Short-Term Debt increase Profitability? The Role of Corporate Governance as a Moderating Variable. International Journal of Organizational Behavior and Policy, 1 (1). pp. 57-70. ISSN 2961-9548

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          Abstract

          This research is conducted to inspect the relationship of Short-Term Debt as a predictor for the financial leverage on Profitability of the company. In the analysis, Short-Term Debt will act as the independent variable and Profitability will be the dependent variable using Return on Equity (ROE) as the indicator. In the model analysis, corporate governance will be used as the moderating variable to bridge the relationship between the independent and dependent variable. In this study, the mediating variable of corporate governance uses Board of Directors (BOD) and board of commissioner (BOC) size, board of independent commissioners� size, managerial and also the institutional ownership. From the analysis, it is shown that Short-Term debt has a significant positive impact on the company�s Profitability. In addition, board size weakens the relationship between financial leverage and profitability. Board size and institutional ownership significantly strengthen the relationship between financial leverage and profitability. Board of independent commissioners� size and managerial ownership did not moderate the relationship between financial leverage and profitability.

          Item Type: Article
          Additional Information: DOI 10.9744/ijobp.1.1.57-70
          Uncontrolled Keywords: Financial leverage; profitability; short-term debt
          Subjects: H Social Sciences > HF Commerce > HF5601 Accounting
          Divisions: Faculty of Economic > Accounting Department
          Depositing User: Admin
          Date Deposited: 09 Mar 2023 19:39
          Last Modified: 27 Apr 2023 16:01
          URI: https://repository.petra.ac.id/id/eprint/19965

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