Determinants Of Capital Structure In Manufacturing Companies In Emerging Stock Market

Abstract

This study aims to examine and obtain empirical evidence that business risk, profitability, tangibility, firm size, liquidity, and asset growth rate, affect the capital structure of manufacturing companies listed on the Indonesia Stock Exchange in the 2017-2021 period. The study was conducted on 95 manufacturing companies listed on the Indonesia Stock Exchange for the period 2017 – 2021. The data used in this study is panel data. The method used in this research is explanatory with a quantitative approach and the sampling used is simple purposive sampling.analysis Explanatory is used to explain the relationships between the variables of capital structure, business risk, profitability, tangibility, firm size, liquidity, and asset growth rate. The results show that profitability and liquidity have a negative effect on capital structure, tangibility and asset growth rate have a positive effect on capital structure, while business risk and firm size have no effect on capital structure. The results also show that the simultaneous test concludes that all independent variables affect the dependent variable.