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

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.