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CAPITAL STRUCTURE DYNAMICS OF LISTED MANUFACTURING FIRMS IN INDONESIA: EXPLORING THE IMPACT OF CONTROL RIGHTS AND FAMILY OWNERSHIP

This study investigates the existence of a dynamic capital structure, the speed of adjustment towards the optimal capital structure, and the influence of control rights and family ownership on the capital structure of Indonesian listed manufacturing firms. Utilizing the difference Generalized Method of Moments (GMM) estimator and the partial adjustment model on a sample of 60 Indonesian firms from 2014 to 2022, this research provides new insights specific to the Indonesian market. Studies of this nature are still scarce in developing countries, making this contribution particularly significant. The results confirm the existence of dynamic capital structure and indicate that it takes approximately 1.92 years for manufacturing firms in Indonesia to achieve their target leverage. This speed of adjustment is faster than that of steel firms in India, which is 2.13 years (Abdullah et al., 2023). In addition to the dynamic trade-off theory and several previous studies, the results of this study are also consistent with the pecking order theory and the market timing theory. Notably, Controlling Shareholder’s Interest is found to have a positive relationship with leverage. The presence of Family Ownership, however, weakens the relationship between Controlling Shareholders’ Interest and Leverage. The influences of Controlling Shareholders’ Interest and Family Ownership on Leverage are consistent with the findings of Amin and Liu (2020) for Singaporean firms. These findings contribute to the existing literature by offering context-specific insights for investors, management, and policymakers in the Indonesian manufacturing sector, thereby enhancing the understanding of capital structure dynamics in emerging markets.

Availability
300074377437RLC MM (Rak Tesis)Available
Detail Information
Series Title
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Statement of Responsibility
Call Number
7437
Publisher
Salemba, Jakarta : Magister Manajemen FEB UI.,
Collation
xi, 51 p. : ill. ; 30 cm.
Language
English
ISBN/ISSN
-
Classification
650
Content Type
-
Edition
-
Subject(s)
Manajemen Keuangan
Tesis
Specific Detail Info
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