Determinant of Debt Policy: Empirical Evidence from Indonesia

Hansen Viriya ()
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Hansen Viriya: Universitas Multimedia Nusantara, Indonesia Author-2-Name: Rosita Suryaningsih Author-2-Workplace-Name: Universitas Multimedia Nusantara, Indonesia

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Abstract: "Objective � The objective of this study is to observe the effects of managerial ownership, institutional ownership, dividend policy, firm growth, business risk, liquidity, and profitability on debt policy. Methodology/Technique � Using the purposive sampling method, secondary data were retrieved from 16 firms that fulfil the criteria of this study. Analysis was made through the multiple regression method. Findings � The results of this research indicate that: (1) managerial ownership has a significantly negative effect on debt policy, (2) institutional ownership has no positive effect on debt policy, (3) dividend policy has no negative effect on debt policy, (4) firm growth has no positive effect on debt policy, (5) business risk has a significantly positive effect on debt policy, (6) liquidity policy has a significantly negative effect on debt policy, (7) profitability has no negative effect on debt policy, (8) managerial ownership, institutional ownership, dividend policy, firm growth, business risk, liquidity, and profitability, simultaneously, have a significant effect on debt policy. Novelty � This study implies that all the independent variables are related to debt policy, simultaneously. This shows that the regression model has an appropriate fit in estimating the accrual value of the model."

Keywords: "Business Risk; Debt Policy; Dividend Policy; Liquidity and Profitability; Managerial and Institutional Ownership." (search for similar items in EconPapers)
JEL-codes: G32 G35 (search for similar items in EconPapers)
Pages: 8
Date: 2017-03-25
New Economics Papers: this item is included in nep-cfn, nep-sbm and nep-sea
References: View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Published in Journal of Finance and Banking Review, Volume 2, Issue 1

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