The Effects of Managerial Ownership, Institutional Ownership, and Profitability on Capital Structure: Firm Size as the Moderating Variable

Muhammad Khafid, Rida Prihatni and Ira Eva Safitri

International Journal of Financial Research, 2020, vol. 11, issue 4, 493-501

Abstract: This study was to analyze the effects of managerial ownership, institutional ownership, and profitability on capital strucuture with firm size as the moderating variable. All manufacturing companies of basic industry and chemical sector listed on Indonesia Stock Exchange during the period of 2014-2017 were the population of the study. There were 66 taken as the samples by using purposive sampling technique. There were 39 companies as research samples and 115 as unit of analysis. Data were collected by documentation method. Then, data were analyzed by using descriptive statistics and inferential statistics. The results of the study indicated that managerial ownership and institutional ownership did not significantly affect capital structure, but profitability had a negative and significant effect on capital structure. Firm size did not have any moderating effect between managerial ownership and profitability on capital strucuture, but firm size moderated the effect between institutional ownership and capital structure. It was concluded that only profitability significantly influenced capital structure, and firm size was able to moderate the effect between institutional ownership and capital structure.

Keywords: institutional ownership; managerial ownership; profitability; capital structure; firm size (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:jfr:ijfr11:v:11:y:2020:i:4:p:493-501

DOI: 10.5430/ijfr.v11n4p493

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