Pecking Order Theory and Trade-Off Theory of Capital Structure: Evidence  from Indonesian Stock Exchange

Culata, Priska Ralna Eunike; Gunarsih, Tri

doi:10.21512/tw.v13i1.666

Cited by 16 publications

(18 citation statements)

References 16 publications

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“…Firms always prefer internal funds to external funds and debt to equity (Jibran, Wajd, Waheed, & Muhammad, 2012). POT is one of the important theories for firm's capital structure (Culata & Gunarsih, 2012). POT does not predict an optimal capital structure, but the order of financial sources (Culata & Gunarsih, 2012).…”

Section: Pecking Order Theorymentioning

confidence: 99%

Determinants of Lending to small and medium Enterprises by Deposit Banks in Nigeria

Aladejebi¹

2019

theijbm

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Determinants of Lending to small and medium Enterprises by Deposit Banks in Nigeria 1. Introduction Small and medium enterprises (SMEs) can be likened to a propeller that powers the engine of a nation's economy for growth and development (Oladele, Olowookere & Akinruwa, 2014). SMEs are businesses involved in different activities across Nigeria. Their businesses include the production of local agricultural implements, bar owners, tailors, iron fabricators, vehicle mechanics, transporters, internet café owners, washmen, software development et al. SMEs are also involved in producing for domestic and international markets. SMEs can be found in rural, urban, regional, national or international markets (Ikpor, Nnabu & Obaji, 2017). According to the United Nations Industrial Development Organisation (UNIDO, 2012), SMEs play a significant role in the economic development of nations as they play a prominent role in the private sector. SMEs make up over 90percent of entrepreneurs of the world and are responsible for 50 to 60percent of employment generation (Ayuba, & Zubairu, 2015). SMEs occupy an essential position in almost every country or state, and they have been recognized so by government and development experts as the main engine of economic growth and a significant force in the promotion of private sector development (Gbadi & Amisah, 2014). For any developing country to grow and develop economically, greater attention must be paid to the SME sector (Awoniyi, 2010). UNCTAD, (2001) observed that finance had been identified in many business surveys and researches as one of the main factors determining the survival and growth of SMEs in both developing and developed countries. Banking sector help to make credit available to firms by mobilizing surplus fund from deposits and channel it in the form of credit to investors (Nwanyanwu, 2012). Finance remains one of the barriers to the growth of SMEs in Nigeria (Lawanson, 2007). Lending is one of the leading business of deposit banks through which they generate income (Asantey & Tengey, 2014). Bank finance is an essential source of funds for most organizations (Yeboah, Asirifi & Adigbo, 2014). Access to finance is vital to business start-up, development, and growth for SMEs (Shikumo & Mwangi, 2016). Deposit Banks play a crucial role in economic resource allocation in many countries. Deposit banks mobilize deposits and channel it to investors who need funds (Ongore & Kusa, 2013). Olusanya, Oyebo & Ohadebere (2012) observed that Deposit banks fund entrepreneurs leading to product development and process. Lack of credit facilities has been identified as one of the barriers to the performance of SMEs in Nigeria (Ikpor, Nnabu & Obaji, 2017). The shortage of capital inhibits the relevance of SMEs solving macroeconomic challenges, inability to access fund from financial agencies (Schneider, 2002). Akambi and Joseph (2013) observed that the level of credit availability has a significant impact on the growth and development of SMEs across the world. Access to finance by SMEs is key ...

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Section: Pecking Order Theorymentioning

confidence: 99%

Determinants of Lending to small and medium Enterprises by Deposit Banks in Nigeria

Aladejebi¹

2019

theijbm

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“…Kinerja bank memerlukan suatu alat untuk menjadi tolok ukur dalam menentukan sehat atau tidaknya bank tersebut. Alat yang sering digunakan untuk hal ini di Indonesia pada umumnya adalah Rasio CAMEL, yaitu gabungan dari beberapa rasio keuangan seperti Capital, Assets, Earnings, Management, dan Liquidity (Payamta & Machfoedz, 1999 (Culata & Gunarsih, 2012). Teori pecking order menyatakan bahwa perusahaan mengandalkan sumber-sumber internal dengan biaya asimetri informasi terendah, kemudian utang dan akhirnya ekuitas dengan biaya asimetri informasi tertinggi.…”

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Pengaruh Rasio Keuangan Camel Terhadap Kondisi Di Bank Perkreditan Rakyat Kabupaten Tabanan

Nuryadiputra

2019

EEB

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Penelitian memiliki tujuan untuk menganalisis probabilitas kondisi bank perkreditan rakyat yang bermasalah yang dipengaruhi oleh rasio CAMEL dengan proksinya adalah rasio CAR, NPL, PPAP, NPM, ROA, BOPO, dan LDR. Populasi dalam penelitian merupakan Bank Perkreditan Rakyat Konvensional yang terdapat di Kabupaten Tabanan. Sampel ditentukan dengan metode sampel jenuh, sehingga jumlah sampel adalah 19 bank untuk 3 tahun pengamatan dari tahun 2015 sampai 2017, sehingga diperoleh 57 observasi. Analisis data dilakukan dengan teknik regresi logistik dengan tingkat signifikansi 5%. Hasil penelitian memperlihatkan bahwa rasio CAR, NPM, dan ROA berpengaruh negatif terhadap probabilitas kondisi bermasalah BPR di Kabupaten Tabanan. Variabel-variabel yang lain yaitu NPL, PPAP, BOPO, dan LDR berpengaruh positif terhadap probabilitas kondisi bermasalah di BPR Kabupaten Tabanan.

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“…Nevertheless, SOE managers need to pay attention to various aspects when they want to determine a source of financing policy. Referring to the trade-off theory (Culata & Gunarsih, 2012), SOEs need to consider the amount of tax that is borne, agency costs, and the costs of financial distress. In addition, when efforts to save taxes on the cost of financial difficulties have reached the optimum point, then financing sourced from debt should be stopped and switch to the use of retained earnings or the issuance of new shares.…”

Section: The Effect Of Liabilities Onprofitabilitymentioning

confidence: 99%

Study of State-Owned Enterprises (SOEs) Profitability in Indonesia 2012-2016 Period

Muin

Jumadi

Wardini

2020

Sriwijaya Int. J. of Dynamic Eco. And Buss.

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One of the purposes of the establishment of SOEs is to become a source of funding for the state. But unfortunately, the losses and potential bankruptcy is still a business challenge to date. Therefore, the aims of this research to analyze the SOEs’ financial performance and the factors that affected profitability. The analysis method used is panel data regression involving 118 financial data companies in the year of 2012-2016. The variables used consisted of return on assets (ROA), total asset growth (TAG), current ratio (CR), total assets turnover (TATO), and debt to equity ratio (DER). After eliminating the outlier data and use other statistical tests, a fixed-model effect (FEM) was obtained. Based on the analysis result, the effect of TAG, CR, and TATO is positive and significant on the ROA. Meanwhile, the effect of the DER is not significant on ROA. This model is able to explain the variation of the dependent variable of 92,40 percent.

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Pecking Order Theory and Trade-Off Theory of Capital Structure: Evidence from Indonesian Stock Exchange

Abstract: ABSRACTNumerous empirical studies in the finance field have tested many theories for firms '

Cited by 16 publications

References 16 publications

Determinants of Lending to small and medium Enterprises by Deposit Banks in Nigeria

Determinants of Lending to small and medium Enterprises by Deposit Banks in Nigeria

Pengaruh Rasio Keuangan Camel Terhadap Kondisi Di Bank Perkreditan Rakyat Kabupaten Tabanan

Study of State-Owned Enterprises (SOEs) Profitability in Indonesia 2012-2016 Period

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