Capital Structure: The Factors That Influence It — Empirical Study on Manufacturing Companies in Indonesia Stock Exchange

Abstract: The purpose of this study is to examine the factors that affect the capital structure of the manufacturing companies listed on the Indonesia Stock Exchange. As the subject of research is manufacturing companies in Indonesia Stock Exchange. The variables used in the study is the tangibility, profitability, firm size, liquidity, and capital structure. The study uses panel data, which is a combination of data time series and cross section. Analysis of data using multiple linear regression method. The results showed that tangibility positive effect on the capital structure on a significance of less than 1%. Profitability (ROA) negatively affect the capital structure on a significance of less than 1%, and liquidity (CR) negatively affect the capital structure on a significance of less than 5%. While the firm size has no effect on the capital structure.

Key words: tangibility; profitability; firm size; liquidity; capital structure