Growth Opportunities, Capital Structure and Dividend Policy in Emerging Market: Indonesia Case Study

• 발행기관: 한국유통과학회
• 저자명: Nevi DANILA Umara NOREEN Noor Azlinna AZIZAN Muhammad FARID Zaheer AHMED
• 간행물 정보: 『The Journal of Asian Finance, Economics and Business(JAFEB)』Vol. 7 No.10, 1~8쪽, 전체 8쪽
• 주제분류: 경제경영 > 경제학
• 파일형태: PDF
• 발행일자: 2020.10.30

영문 초록

The objective of the study is to investigate the effect of growth opportunities on capital structure and dividend policy in Indonesia. The study employs panel data of companies listed on Indonesia Stock Exchange that distribute dividends from 2007 to 2017. Fixed and random effect regression models are used. Findings based on growth opportunities on capital structure and dividend policy in Indonesia are in line with the existing theory (i.e., contracting theory). Growth opportunities have a significant negative correlation with debt ratio and dividend yield, which suggests that firms with high growth opportunities are discouraged to generate debt to resolve underinvestment and asset-substitution problem. Firms with more investment opportunities tend to adopt a low dividend payout policy because the cash flows will be used up for investment. The positive impact of firm size on leverage is due to the low bankruptcy risk and cost of a large company. Profitability has a positive impact on the dividend policy because profitable companies can reserve larger free cash flows and, thus, pay higher dividends. The positive influence of ownership on leverage is interpreted by the unwillingness of majority stockholders to commit to equity financing in order to avoid reducing the ownership and preserve control of the company.

목차

1. Introduction

2. Literature Review

3. Data and Methodology

4. Results and Discussion

5. Conclusion

References

키워드

Growth Opportunities Capital Structure Dividend Emerging Market Leverage