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Determinant of Debt Policy: Empirical Evidence from Indonesia

Author

Listed:
  • Hansen Viriya

    (Universitas Multimedia Nusantara, Indonesia Author-2-Name: Rosita Suryaningsih Author-2-Workplace-Name: Universitas Multimedia Nusantara, Indonesia)

Abstract

"Objective � The objective of this study is to observe the effects of managerial ownership, institutional ownership, dividend policy, firm growth, business risk, liquidity, and profitability on debt policy. Methodology/Technique � Using the purposive sampling method, secondary data were retrieved from 16 firms that fulfil the criteria of this study. Analysis was made through the multiple regression method. Findings � The results of this research indicate that: (1) managerial ownership has a significantly negative effect on debt policy, (2) institutional ownership has no positive effect on debt policy, (3) dividend policy has no negative effect on debt policy, (4) firm growth has no positive effect on debt policy, (5) business risk has a significantly positive effect on debt policy, (6) liquidity policy has a significantly negative effect on debt policy, (7) profitability has no negative effect on debt policy, (8) managerial ownership, institutional ownership, dividend policy, firm growth, business risk, liquidity, and profitability, simultaneously, have a significant effect on debt policy. Novelty � This study implies that all the independent variables are related to debt policy, simultaneously. This shows that the regression model has an appropriate fit in estimating the accrual value of the model."

Suggested Citation

  • Hansen Viriya, 2017. "Determinant of Debt Policy: Empirical Evidence from Indonesia," GATR Journals jfbr117, Global Academy of Training and Research (GATR) Enterprise.
    • Handle: RePEc:gtr:gatrjs:jfbr117
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    Cited by:

    1. Endri Endri & M. Iqbal Rasyid Supeni & Yanti Budiasih & Matdio Siahaan & A. Razak & Sudjono Sudjono, 2021. "Oil Price and Leverage for Mining Sector Companies in Indonesia," International Journal of Energy Economics and Policy, Econjournals, vol. 11(4), pages 24-30.

    More about this item

    Keywords

    Business Risk; Debt Policy; Dividend Policy; Liquidity and Profitability; Managerial and Institutional Ownership.;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G35 - Financial Economics - - Corporate Finance and Governance - - - Payout Policy

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