The relationship between capital structure, firm performance and a firm’s market competitiveness: Evidence from Indonesia

Kartika, Andi; Irsad, Moch; Setiawan, Mulyobudi; Sudiyatno, Bambang

doi:10.21511/imfi.20(1).2023.09

Cited by 5 publications

(5 citation statements)

References 32 publications

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“…This implies that all dependent and independent variables are stationary. The cointegration test using the Pedroni approach further supports this, confirming that the variables in the study are cointegrated (Hoffman & Patton, 1997;Jensen & Meckling, 2019;Kartika et al, 2023;Krisnando & Novitasari, 2021).…”

Section: Panel Unit Root Test Resultssupporting

confidence: 67%

Cultural determinants of capital structure in Indonesian banking

Saleh,

Isnurhadi,

Malinda

et al. 2024

irjmis

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Capital structure decisions play a crucial role in shaping the financial landscape of companies, especially in developing countries. This study examines the cultural determinants of capital structure in Indonesian banking within the macroeconomic context from 2013 to 2022. The capital structure represents the mix of various company funding methods, impacting its value and influencing stakeholders. The debate on how the interplay of debt and assets affects a company's value continues, with the determining factors of capital structure still being explored in financial studies. Using STATA V.17, this research analyzes 30 banking companies listed on the Indonesia Stock Exchange, with leverage as the dependent variable. Financial ratios, including liquidity ratio, profit volatility, growth opportunities, bank size, and external macroeconomic variables such as inflation and Gross Domestic Product (GDP), are examined as potential influencers on the capital structure. The results reveal high leverage in Indonesian banks, with variations in financial approaches. Return on assets, growth opportunities, and inflation exhibit a positive and significant relationship with leverage, while profit volatility, tangibility, bank size, and GDP show a negative and significant relationship. The research suggests limitations in scope, recommending including all Indonesian banking companies and additional external macroeconomic variables like exchange and interest rates.

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Section: Panel Unit Root Test Resultssupporting

confidence: 67%

Cultural determinants of capital structure in Indonesian banking

Saleh,

Isnurhadi,

Malinda

et al. 2024

irjmis

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“…Empirical studies confirm the comprehensive socio-economic significance of innovations and their positive correlation with economic growth indicators in practically all EU countries (Vetsikas et al, 2017;Maradana et al, 2019). The mandatory focus on innovation in the EU is proclaimed in the context of transitioning to sustainable development, for which the synchronicity of progress among all member countries is of utmost importance ( The objectives of ensuring global competitiveness in the EU have acquired collective significance, special content, and reached a supranational level, emphasizing increased attention to innovative activities (Ciocanel & Pavelescu, 2015;Kral & Janoskova, 2023;Kartika et al, 2023). First and foremost, this concerns high-tech industries, where competition and changes in global exports are directly linked to innovative factors.…”

Section: Literature Reviewmentioning

confidence: 70%

Determining the key factors of the innovation gap between EU countries

Polyakov

Khanin

Shevchenko

et al. 2023

Problems and Perspectives in Management

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Innovation plays a crucial role in ensuring economic growth and competitiveness of national economies, creating conditions for their sustainable development. By focusing on supporting innovation, the EU is particularly helping to accelerate the development of those member states that lag far behind the EU average. This requires the selection of the indicators reflecting the development of innovation that determine the differences between member countries to the greatest extent. Therefore, the aim of the study is to identify the key factors of the innovation gap (FIG) between EU countries based on a comparison of indicators characterizing the national innovation systems (NIS). For this purpose, 22 relative indicators were selected from the indicators included in the Global Innovation Index to form an array of empirical data. At the first stage, the EU countries were divided into four clusters using the k-means method. At the second stage, using the decision tree method, a group of indicators was identified that together distinguish the obtained clusters to the greatest extent and, accordingly, determine the differences between EU countries and can be considered as FIG, namely: “Researchers”, “GERD financed by business”, “Joint venture/strategic alliance deals”, “Software spending”, and “High-tech manufacturing”. This allows individual member states to prioritize the development of those indicators (i.e. FIG) that most determine their position in the EU and therefore improve their NIS. At the EU level, this will contribute to the complementarity of the NIS, overcome differences between member states and increase the overall level of convergence in innovation.

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“…For 10 years. In this research there is a reference to previous research as support or support such as Achmady et al (2021), Saputri et al (2022), Ferdiansya & Isnuardi (2023, Kartika et al (2023), Gao & Tsusaka (2023 and Essel (2023) from the research discussed where the capital structure of applying debt over equity can have an influence on a company both in the short and long term.…”

Section: Introductionmentioning

confidence: 96%

Capital Structure: Capital Buffer, Return on Equity, Capital Adequacy Ratio in Go-Public Banking in Indonesia

Wahyudin,

Widiyanti,

Andriana

et al. 2024

jss

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Banking companies may be faced with adjustment costs (cost of capital adjustment) to obtain optimal capital ratios. These costs arise when banks increase or obtain new external capital so that capital adjustments can lead to excess or shortage of capital which can have a negative impact and cause banks to be reluctant to react quickly when capital shocks occur. This research explores the most significant factors that influence bank capital policy choices in Indonesia. This study examines the financing choices of 8 banks for the 2013-2022 period using panel data regression analysis techniques with STATA.17. The results of the Random Effect Model Estimation research where bank companies in Indonesia have high leverage support the fact that the nature of bank business is different from non-banking companies. The significant negative relationship of the capital buffer is in line with the too big fail theory, packing order theory and agency theory, as well as the Retrun On Equity and Capital Adequancy Ratio variables which have a significant positive relationship at an accuracy level of 85.01%, so in other words banking companies can use debt to finance the company on the basis of agency or managerial policies and strategies, thereby proposing pecking order theory with the assumption that there is information asymmetry and agency costs that are relevant both in the long term.

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The relationship between capital structure, firm performance and a firm’s market competitiveness: Evidence from Indonesia

Cited by 5 publications

References 32 publications

Cultural determinants of capital structure in Indonesian banking

Cultural determinants of capital structure in Indonesian banking

Determining the key factors of the innovation gap between EU countries

Capital Structure: Capital Buffer, Return on Equity, Capital Adequacy Ratio in Go-Public Banking in Indonesia

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