Proceedings of the Ninth International Conference on Entrepreneurship and Business Management (ICEBM 2020)

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Financing Decision as a Mediating Variable Between Capital Structure and Firm Performance

Authors
Elsa Imelda, Devina Himelda
Corresponding Author
Elsa Imelda
Available Online 9 May 2021.
DOI
10.2991/aebmr.k.210507.040How to use a DOI?
Keywords
Firm Performance, Capital Structure, Financing Decision
Abstract

The purpose of this research was to empirically examine the influence of capital structure measured by Total-Debt-Ratio (TDR) toward firm performance measured by Tobin’s-Q, with financing decision measured by Retention-Ratio (RR) as a mediating variable. This study used the secondary data obtained from the Indonesia Stock Exchange (IDX). The population of this study is the banking companies listed in IDX for the period of 2016 - 2018. Based on several criteria, 42 banking companies listed in IDX were selected as samples in this study. Data analysis used multiple linear regression with the assistance of EViews 10 program. The Sobel-Test was used to test the significance of the mediating effect. The results of this study indicate that capital structure has a positive and significant effect on firm performance, while financing decision has a negative and significant effect on firm performance. However, financing decision does not significantly mediate the effect of capital structure on firm performance. Company must manage its capital structure in the optimal portion so it can increase company performance. The retained earnings must be used for company development.

Copyright
© 2021, the Authors. Published by Atlantis Press.
Open Access
This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

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Volume Title
Proceedings of the Ninth International Conference on Entrepreneurship and Business Management (ICEBM 2020)
Series
Advances in Economics, Business and Management Research
Publication Date
9 May 2021
ISBN
10.2991/aebmr.k.210507.040
ISSN
2352-5428
DOI
10.2991/aebmr.k.210507.040How to use a DOI?
Copyright
© 2021, the Authors. Published by Atlantis Press.
Open Access
This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

Cite this article

risenwbib
TY  - CONF
AU  - Elsa Imelda
AU  - Devina Himelda
PY  - 2021
DA  - 2021/05/09
TI  - Financing Decision as a Mediating Variable Between Capital Structure and Firm Performance
BT  - Proceedings of the Ninth International Conference on Entrepreneurship and Business Management (ICEBM 2020)
PB  - Atlantis Press
SP  - 266
EP  - 270
SN  - 2352-5428
UR  - https://doi.org/10.2991/aebmr.k.210507.040
DO  - 10.2991/aebmr.k.210507.040
ID  - Imelda2021
ER  -