This study aims to find out whether companies in Indonesia have the existence of target capital structure and factors that affect target leverage for the period 2014 to 2018. This study uses a dynamic partial adjustment model with a generalized method of moments estimator. The company's leverage target is influenced not only by companyspecific factors but also by corporate governance variables so that the corporate governance variable is included in this study. The results of this research indicate that companies in Indonesia appear to have target leverage and are reported to adjust their leverage towards the target level with the adjustment speed of Indonesian firms is 50,29% thus it took 1,98846 years to reach the leverage target. Firm-specific factors such as profitability, size, growth, and tangibility have a significant effect, and corporate governance factors such as board size and family ownership have a significant effect on leverage. The sample of companies is only in Indonesia so that further research can be expanded by adding companies in other countries besides Indonesia and the addition of independent variables. This study of the listed firms in Indonesia contributes to the literature by examining the speed of adjustment and the determinants of optimal leverage.
The purpose of this paper is to predict the determinants of bank margins (bankspecific as well as macroeconomic condition) in Islamic banks by applying SEM-PLS. Data were collected through financial statements of 11 Islamic banks in Indonesia obtained in each website of bank, covering bank quarter observations for the period of 2013 to the second quarter of 2018. The results of this study indicate the specific factors of banks that have the greatest influence on NIM are liquidity variables. In contrast, macroeconomic factors (GDP and inflation) do not have a significant effect on Islamic bank NIMs, but specific bank and macroeconomic factors together affect Islamic bank NIMs. while the macroeconomic condition is not significant. In this study using the method of investigating the determinants of the margin of financial intermediation for Islamic banks operating in Indonesia by applying SEM-PLS. This finding improves our understanding on the usage of SEM-PLS to predict the margin intermediation of Islamic banks. This study provides a guidance and strategy for Islamic bank managers to manage their intermediation margin which can affect their customers interest to use Islamic banking services.
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