THEDETERMINANTSOFCAPITALSTRUCTURE:EVIDENCEFROMINDONESIANFIRMSPOLITEKNIKNEGERISRIWIJAYAPALEMBANG2023SKRIPSI DisusununtukMemenuhiSyaratMenyelesaikanPendidikanSarjanaTerapan(D-IV)AkuntansiSektorPublikpadaJurusanAkuntansiPoliteknikNegeriSriwijaya Oleh:DIAOKTA

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THE DETERMINANTS OF CAPITAL STRUCTURE: EVIDENCE FROM INDONESIAN FIRMS

SKRIPSI

Disusun untuk Memenuhi Syarat Menyelesaikan Pendidikan Sarjana Terapan(D-IV) Akuntansi Sektor Publik pada Jurusan Akuntansi

Politeknik Negeri Sriwijaya

Oleh:

DIA OKTAVIA NINGRUM

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POLITEKNIK NEGERI SRIWIJAYA PALEMBANG

2023 SKRIPSI

Disusun untuk Memenuhi Syarat Menyelesaikan Pendidikan Sarjana Terapan(D-IV) Akuntansi Sektor Publik pada Jurusan Akuntansi

Politeknik Negeri Sriwijaya

Oleh:

DIA OKTAVIA NINGRUM 061840511916

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DECLARATION

I hereby declare that the work was completed by myself and no portion of the work in this thesis has been submitted in support of any other degree or qualification at this or any other university or educational institution.

Dia Oktavia Ningrum

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iii

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KEMENTERIAN PENDIDIKAN, KEBUDAYAAN, RISET DAN TEKNOLOGI POLITEKNIK NEGERI SRIWIJAYA

JURUSAN AKUNTANSI

Jalan Srijaya Negara, Palembang 30139 Telp. 0711-353414 Fax. 0711-355918

Website :www.polsri.ac.idE-mail:akuntansi@polsri.ac.id

DAFTAR PENGUJI SKRIPSI

Mahasiswa berikut,

Nama : Dia Oktavia Ningrum

NIM : 061840511916

Jurusan/Program Studi : Akuntansi/Akuntansi Sektor Publik

Judul Skripsi : The Determinants Of Capital Structure : Evidence From Indonesian Firms

Telah melaksanakan revisi terhadap Skripsi yang diujikan pada hari Rabu tanggal 01 bulan Juni tahun 2022. Pelaksanaan revisi terhadap Skripsi tersebut telah disetujui oleh Dosen Penguji yang memberikan revisi:

No Komentar Nama Dosen

Penguji Universitas Tanggal

1 - Dr. Zaidi Zabri University of Malaya

1/6/2022

2 -

Dr. Periansya Politeknik Negeri Sriwijaya

1/6/2022

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v ABSTRACT

Dia Oktavia Ningrum

Faculty of Business Management & Professional Studies

Management and Science University, 40100 Shah Alam, Selangor, Malaysia ndiaoktavia@gmail.com

Abstract

This paper examines the firm-specific determinants of leverage among Indonesian firms. This paper conducts a panel data analysis of listed firms' observations in the Indonesian stock market from 2008-to 2016. We use panel data analysis to estimate the model and analyses the data from DataStream. The results show that fixed assets, profitability, size, market-to-book ratio, and GDP positively and non- significant impact debt. In contrast, inflation has a positive and non-significant impact on the debt. However, despite the use of relatively recent data and a larger sample of firms compared to the previous limited studies on Indonesia, the results of this study need to be interpreted with caution. First, the selected sample focused on 279 listed companies in Indonesia. Second, the study does not distinguish companies by sector and their leverage position, i.e. too low and too high leverage, so financial decisions may also be influenced by the sector in which the companies operate and their leverage position. This should be considered in future research. Tangibility, size, GDP, and inflation positively impact corporate leverage, while profitability and market-to-book ratio have a negative impact on corporate leverage.

Keywords: Capital structure, profitability, size, market to book ratio, GDP, inflation.

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ACKNOWLEDGEMENT

I was able to finish this research programme attributable to the invaluable assistance, encouragement, and inspiration that I received from a number of different people as well as their active cooperation. As a result, I am in theirdebt, and I would like to take this opportunity to convey my sincere appreciation to them.

I have completed this research program with invaluable support, encouragement, inspiration, and active cooperation from several individuals.

Therefore, I am indebted to them and would like to express my deep gratitude.

First of all, I would like to thank my lecturer, AP. Dr Jaizah Othman, who has always inspired me to do this work AP. Dr. Jaizah Othman is always willing to help her students with their work. Not to forget my supervisor Sir Mior Faizme Yusof Za'ba and Madam Yuliana Sari, S.E., M.Si, Ak., CA. I appreciate their support, kindness, and encouragement, especially in discussions and providing feedback while I was doing this research. I have significantly benefited from their continued assistance with discussions of my research and their mutual guidance throughout.

Last but not least, my great appreciation and thanks are due to my family (Popop, Momom, Adek and Untet) and friends (Bella, Asni, Nadia, Lilis, Romi, Arif and EDS Polsri). In particular, I would like to thank my class mate (Ojan, Ijar, Wahed and 8MSU) and also my roommate ( Putri, Kak Li, Amel and Zella) with whom I shared my idea this whole time. Their experience, knowledge, and support were very helpful in carrying out this work.

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DEDICATION

vii

This study is dedicated from the bottom of my heart to my cherished family, friends, and classmates who gave me words of advice, strength, and encouragement when I considered giving up and who continue to provide me with moral support, spiritual, emotional, and financial support. In addition, my lecturer Dr. Jaizah Binti Othman and Sir Mior Faizme Yusof Za'ba served as a source of inspiration and a pillar of support during the completion of this thesis. And finally, I would like to thank the Almighty God for providing me with guidance, strength, mind power, protection, and skills, as well as a healthy life. All of these, I offer to you.

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TABLE OF CONTENTS

DECLARATION... ii

LEMBAR PENGESAHAN SKRIPSI...iii

DAFTAR PENGUJI SKRIPSI...vi

ABSTRACT...v

ACKNOWLEDGEMENT... vi

DEDICATION... vii

TABLE OF CONTENTS...viii

LIST OF TABLES...x

LIST OF FIGURES...xi

LIST OF APPENDICES...xii

CHAPTER I... 13

INTRODUCTION... 13

1.1 Introduction...13

1.2 Background of study... 13

1.3 Research issues and problem statement... 15

1.4 Research objective... 16

1.5 Research questions...16

1.6 Significance of study...15

1.7 Scope of Study... 17

1.8 Summary of the chapter... 17

CHAPTER II...19

LITERATURE REVIEW... 19

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TABLE OF CONTENTS

ix

2.3 Conceptual framework...21

2.4 Empirical Study Analysis...23

2.5 Summary... 25

CHAPTER 3...26

RESEARCH METHODOLOGY... 26

3.2 Data and period of the study... 26

3.3 Data analysis and method...26

3.5 Variables... 27

3.6 Summary... 28

CHAPTER 4...29

DATA ANALYSIS AND FINDINGS...29

4.2 Descriptive Statistics...29

4.2 Multicollinearity...30

4.3 Regression...30

4.4 Summary of Findings...33

CHAPTER 5...34

CONCLUSIONS AND RECOMMENDATIONS...34

5.2 Conclusion... 34

5.3 Recommendations...34

5.4 Limitations of Study...35

REFERENCES... 36

APPENDICES...39

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LIST OF TABLES

Table 1.1 : Sector Company Listed in Bursa Efek Indonesia...14

Table 3.1 : Variables Definition…...27

Table 4.1 : Descriptive Statistics…...29

Table 4.2 : Correlation Matrix…...30

Table 4.3 : The Random Effect Model Regression…...31

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LIST OF FIGURES

xi

Figure 2.1 : Proposed relationship between independent variables and

dependent variables…...22

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Desciptive statistics…...39

Matrix correlations...39

Linear regression…...39

Regression results (Random Effect Model)…...40

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