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Decentralization and Regional Inflation in Indonesia

Author

Listed:
  • Darius Tirtosuharto
  • Handri Adiwilaga

    (Bank Indonesia)

Abstract

This paper examines the influence of profitability, growth opportunity, and capital structure on firm value. We apply Structural Equation Model (SEM) on 150 listed companies on the Indonesia Stock Exchange during 2006 to 2010. The result shows that profitability, growth opportunity and capital structure positively and significanctly affect the company’s value. Secondly, the capital structure intervene the effect of growth profitability on company’s value, but not for profitability.

Suggested Citation

  • Darius Tirtosuharto & Handri Adiwilaga, 2013. "Decentralization and Regional Inflation in Indonesia," Bulletin of Monetary Economics and Banking, Bank Indonesia, vol. 16(2), pages 149-166, October.
    • Handle: RePEc:idn:journl:v:16:y:2013:i:2d:p:149-166
    DOI: https://doi.org/10.21098/bemp.v16i2.30
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    More about this item

    Keywords

    profitability; growth opportunitiy; capital structure; firm value; SEM;
    All these keywords.

    JEL classification:

    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

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