Corporate Governance Mechanism and Capital Structure Decision: Evidence from Indonesia

Lestari, Agnes and Murhadi, Werner Ria and Ernawati, Endang (2024) Corporate Governance Mechanism and Capital Structure Decision: Evidence from Indonesia. Journal of Entrepreneurship & Business, 5 (1). pp. 79-89. ISSN 2721-706X

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Abstract

Purpose: Decisions related to the capital structure are crucial for companies because the proportion of funding from debt and equity determines the company's value and is directly related to shareholders' welfare. This study aims to examine how corporate governance affects the capital structure.Method:Board size, board independence, ownership concentration, audit reputation, management ownership, and institutional ownership are the independent variables considered in this study. In contrast,control variableswere defined as firm size, liquidity, profitability, and growth. In order to determine how corporate governance affects capital structure in a sample of 395 non-financial companies listed on the Indonesia Stock Exchange, this study employs multiple linearregression analysis.Result: The capital structure is significantly impacted negatively by board size, ownership concentration, firm size, profitability, and growth while positively impacted by independent commissioners, auditor reputation, managerial ownership, and institutional ownership. Liquidity has no impact on the capital structure

Item Type:	Article
Uncontrolled Keywords:	Capital Structure, Corporate Governance, Board Size, Audit Reputation, Managerial Ownership
Subjects:	H Social Sciences > HG Finance
Divisions:	Faculty of Business and Economic > Department of Management
Depositing User:	Werner R. Murhadi 31124
Date Deposited:	07 Feb 2024 01:45
Last Modified:	07 Feb 2024 01:45
URI:	http://repository.ubaya.ac.id/id/eprint/45895

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