Interactions between Capital Structure and Profitability: Evidence from Indonesia Stock Exchange
| Main Author: | Arifin, Agus Zainul |
|---|---|
| Format: | Article PeerReviewed Book |
| Bahasa: | eng |
| Subjects: | |
| Online Access: |
http://repository.untar.ac.id/13345/1/buktipenelitian_10190018_3A024251.pdf http://repository.untar.ac.id/13345/ |
Daftar Isi:
- The objective of the study is to reexamine the relationship between capital structure and profitability of companies in Indonesia. The study was conducted because of the ambiguity of the relationship between two variables that many researchers have done before. Ambiguity in question is the inconsistency of the relationship, which is what the variable as independent and other variable are as dependent. Sample data of all non-financial companies are listed on the Indonesian Stock Exchange (IDX). Analysis has been done using the Granger causality, which is to determine the direction of the relationship between capital structure and profitability. The results showed that the relationship between capital structure and profitability is unidirectional, namely variable of capital structure as an endogenous variable, and profitability as an exogenous variable using the lag level of two, thus from profitability to capital structure.