The Effect of Managerial Overconfidence and Government Ownership to Financing Decision of State Owned Enterprises in Indonesia

Company funding has an important role for the company, because with the optimal capital structure, the company can fund operational activities effectively. An optimal capital structure decision requires a competent managerial role to analyze funding needs. The managers confidence has an effect on the companys capital structure. Beside this, the governments ownership is also a factor affecting the capital structure. This study aims to examine the effect of managerial Overconfidence and Government Ownership on financing decisions of State-Owned Enterprises listed on the Indonesia Stock Exchange period year 2012 to 2016. The variables used in this study include Managerial Overconfidence which measured by indicators: profile photo, educational level, work experience, gender, connections, and performance of the CEO; variable Government Ownership, and the control variable consisting: Ownership Concentration, Profitability, Firm Size, Tangibility, Growth, and Research & Development. The method used is multiple linear regression. The type of data is the panel data. The samples are twenty two State Owned Enterprises Going Public that have annual financial reports during the year 2012 to 2016. The research results showed the Managerial Overconfidence (CEO Performance) and control variables consists Profitability, Tangibility, and Research & Development have significant influence on the capital structure of Stated Owned Enterprise Going Public.