DETERMINANT OF CAPITAL STRUCTURE: EVIDENCE FROM MANUFACTURE LISTED COMPANY IN INDONESIA STOCK EXCHANGE (IDX)

Abstract
The purpose of this research is to quantify and evaluate the impact of firm size, tangibility, liquidity, profitability, and growth on a manufacturing company’s capital structure in Indonesia. This Research makes use of panel data spanning the years 2017-2021 with 164 companies listed in the Indonesia Stock Exchange also 820 data are gathered. The study gathered the data for firm-level data from Data Stream and country-level data from the World Bank database and analyse using Stata 16.0 and Microsoft Excel program, which used multiple regression analysis. The findings indicated that although size, profitability, and growth negatively influence firm leverage they have a statistically significant relationship with firm leverage. Also, tangibility has a negative impact on firm leverage but it statistically insignificant. On the other hand, liquidity is the only independent variable that has positive impact to firm leverage and its relations to firm leverage is insignificant.

Keywords:
Capital structure, size, tangibility, liquidity, profitability, growth