Co-determination of Capital Structure and Profitability: An Empirical Test of Indonesia Stock Exchange

다국어 초록 (Multilingual Abstract)

This research aims to analyze the determinant of capital structure and profitability. Besides, it will also be tested to know whether there is a reciprocal relationship between this capital structure and profitability or not. The object of this research is using the registered manufacture company on the Indonesian Stock Exchange. The number of companies pointed as the samples in this research is 115 companies. The observation period is between 2012 – 2018 or for about 7 years so that the analysis units of this research are 805. The analysis tool used in this research is the Structural Equation Modeling by using generalized structural component analysis. It creates the results of Nondebt tax shield, effective tax rate, financial flexibility, liquidity; growth, uniqueness, assets utilization, firm size, tangibility, volatility, and profitability have an impact on the capital structure. It is known that only a firm age that doesn’t have any significant impacts on the capital structure. Liquidity, growth, firm age, uniqueness, firm size, tangibility, volatility, advertising, assets turnover, and capital affect profitability. Besides that, capital structure and profitability have a significant reciprocal relationship.

목차 (Table of Contents)

• ABSTRACT
• 1. INTRODUCTION
• 2. LITERATURE REVIEW
• 3. THE METHODOLOGY OF THE STUDY
• 4. EMPIRICAL RESULT AND ANALYSIS
• 5. CONCLUSION
• REFERENCES

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