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Financial Performance as Mediator on the Impact of Capital Structure, Wealth Structure, Financial Structure on Stock Price: The Case of The Indonesian Banking Sector

Author

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  • Andi Mansyur

    (Postgraduate School of Indonesian Muslim University Makassar, Indonesia)

  • Abd. Rahman Mus

    (Indonesian Muslim University Makassar, Indonesia)

  • Zainuddin Rahman

    (Indonesian Muslim University Makassar, Indonesia)

  • Suriyanti Suriyanti

    (Indonesian Muslim University Makassar, Indonesia)

Abstract

This research examines the financial performance as a mediating variable in analyzing the capital structure, wealth structure, and financial structure of stock prices by using trade-off theory and signaling theory. This study uses 145 secondary data in the form of bank financial reports listed on the Indonesia Stock Exchange (IDX). Model testing uses structural equation (SEM) through the SmartPLS version 3.0 programs. The results of model testing show that capital structure and financial structure can reduce financial performance, wealth structure can improve financial performance. High financial performance cannot increase stock prices. The capital structure does not lower the stock price, the wealth structure raises the stock price, and the financial structure lowers the stock price. Financial performance does not mediate the effect of capital structure, wealth structure, and financial structure on stock prices.

Suggested Citation

  • Andi Mansyur & Abd. Rahman Mus & Zainuddin Rahman & Suriyanti Suriyanti, 2020. "Financial Performance as Mediator on the Impact of Capital Structure, Wealth Structure, Financial Structure on Stock Price: The Case of The Indonesian Banking Sector," European Journal of Business and Management Research, European Open Science, vol. 5(5), September.
    • Handle: RePEc:epw:ejbmr0:v:5:y:2020:i:5:id:50526
    DOI: 10.24018/ejbmr.2020.5.5.526
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