The determinants of capital structure: evidence from selected Indonesian companies that have undergone debt restructuring

TJAHJONO, YOSEPHINE MEVIA and BAVANI, MELINDA and CHANDRA, TIRZAH FEBIOLA and Linawati, Nanik (2023) The determinants of capital structure: evidence from selected Indonesian companies that have undergone debt restructuring. In: International Conference on Economy, Management, and Business (IC-EMBus), 23-11-2023 - 23-11-2023, Bangkalan - Indonesia.

	PDF Download (340Kb)
	PDF Download (1861Kb)

Abstract

The capital structure is one of the reflections of companies that undergo debt restructuring. This study aims to analyze the determination for companies undergoing debt restructuring in Indonesia. The independent variables used in this research are profitability, growth opportunities, collateral, liquidity, and earnings volatility, while the dependent variable is the capital structure. This research used data obtained from 30 selected debt restructuring events in Indonesian companies during the period of 2003-2022. The research was statistically analyzed using the multiple linear regression analysis methods, and the data collected from Refinitiv database. In obtaining the analysis results, the author used IBM SPSS Statistics version 25 to process the data. The findings of this research indicate that profitability, liquidity, and earnings volatility variables have a significant impact on the amount of debt. The results differ for growth opportunities and collaterals, which show no significant influence on the decision to debt restructuring. These findings support the pecking order theory, where companies that restructure debt tend to use internal fund and debt to finance operations rather than using equity. The findings of this research will also help in understanding the determinants of debt restructuring decisions.

Actions (login required)