Analysis of Capital Structure on Multinational Corporation: Trade off Theory and Pecking Theory Perspective

DOI

10.2991/assehr.k.210312.012How to use a DOI?

Keywords

Capital structure, business risk, growth of assets, volatility of cash flows

Abstract

The research aims to analyses the capital structure applied in multinational companies for the effectiveness and efficiency of the company’s financing. This research uses independent variables i.e. business risk, asset growth, and cash flow volatility. The population of this research consists of all companies listed on the Indonesia Stock Exchange from year 2010-2019. The study took samples with the technical purposive sampling of multinational corporations that are non-financial institutions. Data analysis methods use multiple liner regression. The results showed that the capital structuring analysis was heavily influenced by business risk, asset growth, and cash flow volatility. That is, the company in determining the policy on managing the proportion of debt and equity as a source of funding the company can consider the condition of business risk, growth of assets, and volatility of cash flows owned by companies.

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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TY  - CONF
AU  - Elok Faiqoh Himmah
AU  - Astari Dianty
PY  - 2021
DA  - 2021/03/13
TI  - Analysis of Capital Structure on Multinational Corporation: Trade off Theory and Pecking Theory Perspective
BT  - Proceedings of the First International Conference on Science, Technology, Engineering and Industrial Revolution (ICSTEIR 2020)
PB  - Atlantis Press
SP  - 70
EP  - 77
SN  - 2352-5398
UR  - https://doi.org/10.2991/assehr.k.210312.012
DO  - 10.2991/assehr.k.210312.012
ID  - Himmah2021
ER  -