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The Effect of Capital Structure on Telecommunication Firm Performance

Author

Listed:
  • Rizal Ahmad Fauzi
  • Noer Azam Achsani
  • Trias Andati
  • Lukytawati Anggraeni

Abstract

This study analyzes the effect of capital structure on the performance of telecommunications firms. The firm performance is measured by return on assets while capital structure is proxied with the ratio of debt total assets. Data of telecommunication firm in 62 countries period of year 2010-2020 proceed with a dynamic data panel regression model using the generalized method of moment approach. The empirical results indicated that capital structure of telecommunication firm has significantly impact to the firm performance in developed and developing countries as well as in integrated and wireless telecommunication firms. The other factors that effect on firm performance are firm size and growth. The novelty of this study lies in the scope of analyses that cover world-wide telecommunication industry based on demographic group (developed and developing countries) and main businesses (integrated and wireless telecommunication).

Suggested Citation

  • Rizal Ahmad Fauzi & Noer Azam Achsani & Trias Andati & Lukytawati Anggraeni, 2022. "The Effect of Capital Structure on Telecommunication Firm Performance," International Journal of Finance & Banking Studies, Center for the Strategic Studies in Business and Finance, vol. 11(2), pages 98-108, April.
    • Handle: RePEc:rbs:ijfbss:v:11:y:2022:i:2:id:1798
    DOI: 10.20525/ijfbs.v11i2.1798
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    References listed on IDEAS

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    1. Heimeshoff Ulrich, 2013. "What Drives Investment in Telecommunications Markets? Evidence from OECD Countries," Review of Economics, De Gruyter, vol. 64(1), pages 7-28, April.
    2. Kayhan, Ayla & Titman, Sheridan, 2007. "Firms' histories and their capital structures," Journal of Financial Economics, Elsevier, vol. 83(1), pages 1-32, January.
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