Industry growth, ownership structure, and capital structure in Indonesia Iman Harymawan, Avelina Arianto, Yuanita Intan Paramitasari
Universitas Airlangga
Abstract
The purpose of this study is to analyze whether industry classification has an effect on capital structure and whether foreign ownership structure has more influence on capital structure than domestic ownership structure. This study uses 524 companies listed on the Indonesia Stock Exchange for three periods from 2014 to 2016 and using the Ordinary Least Square (OLS) regression method to test the hypotheses. This study found that industry classification has an effect on capital structure. Companies that are classified as high (low) growth industry have a positive (negative) and significant association on capital structure. Furthermore, firm with foreign ownership structure has significantly higher capital structure than domestic ownership. The findings from this study indicates that firms with foreign ownership and firms in high growth industries are more attractive to debt holder in Indonesia.
Keywords: Industry classification, industry growth, foreign ownership, capital structure
