THE EFFECT OF MANAGERIAL OWNERSHIP AND INSTITUTIONAL OWNERSHIP ON DEBT POLICY : EVIDENCE FROM MANUFACTURING FIRM LISTED ON INDONESIA STOCK EXCHANGE
Keywords:
Managerial Ownership, Institutional Ownership, Debt Policy
Abstract
This study was conducted to test variable impact managerial ownership and institutional ownership on debt policy. The study used the method purposive sampling. Some of the sample criteria or considerations used in the study are as follows: companies that fall under the manufacturing sector; companies that release financial reports for the years 2018 to 2022; excludes companies that underwent an initial public offering (IPO) and filed for bankruptcy between 2018 and 2022; and companies that have been in business for at least five years, so that a sample was obtained after being chosen using a sampling technique of 28 manufacturing companies listed on the Indonesia Stock Exchange (IDX).
The data in this study were processed using Smart-PLS with partial equation modeling. The hypothesis testing method uses a significance level of 5%.The results showed that managerial ownership has no effect on debt policy and institutional ownership have a significance positive on debt policy.
References
Afiezan, A., Wijaya, G., Priscilia, P., & Claudia, C. (2020). The Effect of Free Cash Flow, Company Size, Profitability and Liquidity on Debt Policy for Manufacturing Companies Listed on IDX in 2016-2019 Periods. Budapest International Research and Critics Institute (BIRCI-Journal): Humanities and Social Sciences, 3(4), 4005–4018. https://doi.org/10.33258/birci.v3i4.1502
Ali, J., Tahira, Y., Amir, M., Ullah, F., Tahir, M., Shah, W., Khan, I., & Tariq, S. (2022). Leverage, Ownership Structure and Firm Performance. Journal of Financial Risk Management, 11(01), 41–65. https://doi.org/10.4236/jfrm.2022.111002
Ali, K., Nadeem, M., Pandey, R., & Bhabra, G. S. (2023). Do capital markets reward corporate climate change actions? Evidence from the cost of debt. Business Strategy and the Environment, 32(6), 3417–3431. https://doi.org/10.1002/bse.3308
Alves, S. (2023). The impact of managerial ownership on audit fees: Evidence from Portugal and Spain. Cogent Economics and Finance, 11(1). https://doi.org/10.1080/23322039.2022.2163078
Ardillah, K., & Halim, Y. (2022). The Effect of Institutional Ownership, Fiscal Loss Compensation, and Accounting Conservatism on Tax Avoidance. Journal of Accounting Auditing and Business, 5(1). https://doi.org/10.24198/jaab.v5i1.37310
Arif, I., Amin, M., Razak, A., & Hadi, A. (2023). Indonesian Journal of Business, Accounting and Management Assessing business and financial risks: A case study of sapura energy bhd in the oil and gas industry. 6(1), 1–10. https://doi.org/10.36406/ijbam.v6i01.884
Aziz, S. (2023). Journal of Business Administration and Management Sciences. Journal of Business Administration and Management Sciences, 05(01), 2663–7073. https://doi.org/10.58921/jobams.v5iIssue%201.94
Benteng, B. L., Muslim, B., & Moin, A. (n.d.). Ownership Structure, Debt Policy, and Financial Constraints. 5(1), 63–90. https://doi.org/10.29259/sijdeb.v5i1.63-90
Chikosi, L. C., & Mutezo, A. T. (2023). MANAGERIAL OWNERSHIP, BOARD GENDER DIVERSITY, OCCUPATIONAL HEALTH, AND SAFETY RISK MANAGEMENT IN AN EMERGING ECONOMY. Journal of Governance and Regulation, 12(S1), 230–241. https://doi.org/10.22495/jgrv12i1siart3
Cicchiello, A. F., Cotugno, M., Monferrà, S., & Perdichizzi, S. (2022). Which are the factors influencing green bonds issuance? Evidence from the European bonds market. Finance Research Letters, 50. https://doi.org/10.1016/j.frl.2022.103190
Chin, W and Todd P. 1995. On the Use, Usefulness, and Ease of Use of Structural Equation Modeling in MIS Research : A Note of Caution. Journal of Management Information System Quarterly. Vol 9 No. 5.
Ellimäki, P., Aguilera, R. V., Hurtado-Torres, N. E., & Aragón-Correa, J. A. (2023). The link between foreign institutional owners and multinational enterprises’ environmental outcomes. Journal of International Business Studies, 54(5), 910–927. https://doi.org/10.1057/s41267-022-00580-0
Fajarwati, D. (2023). The Effect of Tax Avoidance, Company Size, and Good Corporate Governance on the Cost of Debt. Paradigma, 20(1), 114–129. https://doi.org/10.33558/paradigma.v20i1.7003
Gajdosikova, D., Lăzăroiu, G., & Valaskova, K. (2023). How Particular Firm-Specific Features Influence Corporate Debt Level: A Case Study of Slovak Enterprises. Axioms, 12(2). https://doi.org/10.3390/axioms12020183
Hegazy, K., & Stafford, A. (2021). Internal and external auditors responsibilities and relationships with audit committees in two English public sector settings. Corporate Ownership and Control, 18(3, special issue), 395–409. https://doi.org/10.22495/cocv18i3siart13
Hussain, S., Ali, R., Emam, W., Tashkandy, Y., Mishra, P., Fahlevi, M., & Matuka, A. (2023). Economic Policy Uncertainty and Firm Value: Impact of Investment Sentiments in Energy and Petroleum. Sustainability (Switzerland), 15(12). https://doi.org/10.3390/su15129656
Jansen, K., Michiels, A., Voordeckers, W., & Steijvers, T. (2023). Financing decisions in private family firms: a family firm pecking order. Small Business Economics, 61(2), 495–515. https://doi.org/10.1007/s11187-022-00711-9
Jebran, K., & Chen, S. (2022). Corporate policies and outcomes during the COVID-19 crisis: Does managerial ability matter? Pacific Basin Finance Journal, 73. https://doi.org/10.1016/j.pacfin.2022.101743
Jensen, M. C., Meckling, W. H., Benston, G., Canes, M., Henderson, D., Leffler, K., Long, J., Smith, C., Thompson, R., Watts, R., & Zimmerman, J. (1976). Theory of the Firm: Managerial Behavior, Agency Costs and Ownership Structure. In Journal of Financial Economics (Issue 4). Harvard University Press. http://hupress.harvard.edu/catalog/JENTHF.html
Koutoupis, A. G., Davidopoulos, L. G., Azibi, J., Hakimi, A., & Mansali, H. (2023). Greenhouse gas assurance, board diversity and cost of debt: a quantile approach. EuroMed Journal of Business. https://doi.org/10.1108/EMJB-10-2022-0190
Kusnanto, E., Kasih, S., & Jakarta, B. (2023). JOURNAL OF INFORMATION SYSTEMS AND MANAGEMENT INFLUENCE OF INTELLECTUAL CAPITAL AND INSTITUTIONAL OWNERSHIP AT FINANCIAL DISTRESS WITH CASH FLOW OPERATING AS INTERVENING VARIABLE. https://jisma.org
Kusuma Wardani, D., Dwi Sari Rumahorbo Program Studi Akuntansi, H., & Ekonomi Universitas Sarjanawiyata Tamansiswa Yogyakarta, F. (n.d.). PENGARUH PENGHINDARAN PAJAK, TATA KELOLA DAN KARAKTERISTIK PERUSAHAAN TERHADAP BIAYA HUTANG. https://doi.org/10.24964/ja.v6i2.691
Lin, S.-Y., Hsu, C.-C., & Chang, J.-C. (2023). The Study of Corporate Social Responsibility and Ownership Structure on Bank’s Financial Performance in Taiwan. Advances in Management and Applied Economics, 321–334. https://doi.org/10.47260/amae/13616
Lyu, Y., Ji, Z., Zhang, X., & Zhan, Z. (2023). Can Fintech Alleviate the Financing Constraints of Enterprises?—Evidence from the Chinese Securities Market. Sustainability (Switzerland), 15(5). https://doi.org/10.3390/su15053876
Mariani. (n.d.). 1431-3793-1-SM.
Mulya Ningrum, G. (2023). Does The Investment Opportunity Set Strengthen The Effect of Profitability, Managerial Ownership and Capital Structure on Firm Value? Journal of Business, Social and Technology CV. Syntax Corporation Indonesia Journal of Business, Social and Technology, 4(1). https://doi.org/10.46799/jbt.v4i1.130
Myers, S. C., & Majiuf, N. S. (1981). CORPORATE FINANCING AND INVESTMENT DECISIONS WHEN FIRMS HAVE INFORMATION THE INVESTORS DO NOT HAVE.
Onjewu, A. K. E., Walton, N., & Koliousis, I. (2023). Blockchain agency theory. Technological Forecasting and Social Change, 191. https://doi.org/10.1016/j.techfore.2023.122482
Profitabilitas, A. P., Manajerial, K., Deviden, K., Ukuran, D., Terhadap, P., Hutang, K., Setiyani, S. D., & Sudarsi, S. (2023). SEIKO : Journal of Management & Business. SEIKO : Journal of Management & Business, 6(1), 889–901. https://doi.org/10.37531/sejaman.v6i1.3096
Putri, N. S., & Dillak, V. J. (2023). Pengaruh Ukuran Perusahaan, Non Debt Tax Shield, Tangibility Assets Dan Kepemilikan Institusional Terhadap Struktur Modal (Studi pada Perusahaan Sektor Properti dan Real Estate yang Terdaftar di BursaEfek Indonesia Periode 2017-2020) (Vol. 10, Issue 2).
Rahmawati, A., & Garad, A. (2023). Managerial Ownership, Leverage, Dividend Policy, Free Cash Flow, Firm Value: Evidence in Indonesia Stock Exchange. European Journal of Studies in Management and Business, 25, 32–44. https://doi.org/10.32038/mbrq.2023.25.03
Sakala, J. C., & Hapompwe, C. (2023). Analyzing Small and Medium Enterprises’ Perception towards Private Equity as an Alternative Source of Finance in Lusaka District. JOURNAL OF ECONOMICS, FINANCE AND MANAGEMENT STUDIES, 06(01). https://doi.org/10.47191/jefms/v6-i1-38
Setianingsih Nurohmah, W. (2023). The effect of company growth, asset structure, and profitability on debt policy. 1, 167–173. https://doi.org/10.20885/InCAF.vol1.art19
Thanatawee, Y. (2023). Institutional ownership and cost of debt: evidence from Thailand. Cogent Business and Management, 10(2). https://doi.org/10.1080/23311975.2023.2207693
Tri Amanda, S., Akhyar, C., & Nur Ilham, R. (n.d.). THE EFFECT OF INFLATION, EXCHANGE EXCHANGE, INTEREST RATE ON STOCK PRICE IN THE TRANSPORTATION SUB-SECTOR, 2018-2020. https://jaruda.org
Trikartika Gustyana, T., & Putri Hanari, S. (n.d.). PENGARUH CORPORATE GOVERNANCE TERHADAP STRUKTUR MODAL PADA SEKTOR BARANG KONSUMEN NON-PRIMER YANG TERDAFTAR DI BEI. 6(3), 2022.
Wahyu, E., & Budianto, H. (n.d.). Dividend Payout Ratio (DPR) in Islamic and Conventional Banking: Mapping Research Topics using VOSviewer Bibliometric and Library Research. https://doi.org/10.5281/zenodo.10117564
Wei, H., Xie, E., & Gao, J. (2024). R&D Investment and Debt Financing of High-Tech Firms in Emerging Economies: The Role of Patents and State Ownership. IEEE Transactions on Engineering Management, 71, 753–770. https://doi.org/10.1109/TEM.2021.3133330
Yahaya, O. A., Agbi, S., Tnushi, P. T., Adabenege, O., Phd, Y., Eniola, S., & Phd, A. (2023). Ownership Structure and Dividend Policy of Listed Deposit Money Banks in Nigeria. International Journal of Management Science and Business Administration, 1(0), 8–82. https://doi.org/10.18775/ijmsba.1849-5664-5419.2023.91.1004
Zhitao, W., & Xiang, M. (2023). Financial mismatch on corporate debt default risk: Evidence from China. Pacific Basin Finance Journal, 80. https://doi.org/10.1016/j.pacfin.2023.102077
Ali, J., Tahira, Y., Amir, M., Ullah, F., Tahir, M., Shah, W., Khan, I., & Tariq, S. (2022). Leverage, Ownership Structure and Firm Performance. Journal of Financial Risk Management, 11(01), 41–65. https://doi.org/10.4236/jfrm.2022.111002
Ali, K., Nadeem, M., Pandey, R., & Bhabra, G. S. (2023). Do capital markets reward corporate climate change actions? Evidence from the cost of debt. Business Strategy and the Environment, 32(6), 3417–3431. https://doi.org/10.1002/bse.3308
Alves, S. (2023). The impact of managerial ownership on audit fees: Evidence from Portugal and Spain. Cogent Economics and Finance, 11(1). https://doi.org/10.1080/23322039.2022.2163078
Ardillah, K., & Halim, Y. (2022). The Effect of Institutional Ownership, Fiscal Loss Compensation, and Accounting Conservatism on Tax Avoidance. Journal of Accounting Auditing and Business, 5(1). https://doi.org/10.24198/jaab.v5i1.37310
Arif, I., Amin, M., Razak, A., & Hadi, A. (2023). Indonesian Journal of Business, Accounting and Management Assessing business and financial risks: A case study of sapura energy bhd in the oil and gas industry. 6(1), 1–10. https://doi.org/10.36406/ijbam.v6i01.884
Aziz, S. (2023). Journal of Business Administration and Management Sciences. Journal of Business Administration and Management Sciences, 05(01), 2663–7073. https://doi.org/10.58921/jobams.v5iIssue%201.94
Benteng, B. L., Muslim, B., & Moin, A. (n.d.). Ownership Structure, Debt Policy, and Financial Constraints. 5(1), 63–90. https://doi.org/10.29259/sijdeb.v5i1.63-90
Chikosi, L. C., & Mutezo, A. T. (2023). MANAGERIAL OWNERSHIP, BOARD GENDER DIVERSITY, OCCUPATIONAL HEALTH, AND SAFETY RISK MANAGEMENT IN AN EMERGING ECONOMY. Journal of Governance and Regulation, 12(S1), 230–241. https://doi.org/10.22495/jgrv12i1siart3
Cicchiello, A. F., Cotugno, M., Monferrà, S., & Perdichizzi, S. (2022). Which are the factors influencing green bonds issuance? Evidence from the European bonds market. Finance Research Letters, 50. https://doi.org/10.1016/j.frl.2022.103190
Chin, W and Todd P. 1995. On the Use, Usefulness, and Ease of Use of Structural Equation Modeling in MIS Research : A Note of Caution. Journal of Management Information System Quarterly. Vol 9 No. 5.
Ellimäki, P., Aguilera, R. V., Hurtado-Torres, N. E., & Aragón-Correa, J. A. (2023). The link between foreign institutional owners and multinational enterprises’ environmental outcomes. Journal of International Business Studies, 54(5), 910–927. https://doi.org/10.1057/s41267-022-00580-0
Fajarwati, D. (2023). The Effect of Tax Avoidance, Company Size, and Good Corporate Governance on the Cost of Debt. Paradigma, 20(1), 114–129. https://doi.org/10.33558/paradigma.v20i1.7003
Gajdosikova, D., Lăzăroiu, G., & Valaskova, K. (2023). How Particular Firm-Specific Features Influence Corporate Debt Level: A Case Study of Slovak Enterprises. Axioms, 12(2). https://doi.org/10.3390/axioms12020183
Hegazy, K., & Stafford, A. (2021). Internal and external auditors responsibilities and relationships with audit committees in two English public sector settings. Corporate Ownership and Control, 18(3, special issue), 395–409. https://doi.org/10.22495/cocv18i3siart13
Hussain, S., Ali, R., Emam, W., Tashkandy, Y., Mishra, P., Fahlevi, M., & Matuka, A. (2023). Economic Policy Uncertainty and Firm Value: Impact of Investment Sentiments in Energy and Petroleum. Sustainability (Switzerland), 15(12). https://doi.org/10.3390/su15129656
Jansen, K., Michiels, A., Voordeckers, W., & Steijvers, T. (2023). Financing decisions in private family firms: a family firm pecking order. Small Business Economics, 61(2), 495–515. https://doi.org/10.1007/s11187-022-00711-9
Jebran, K., & Chen, S. (2022). Corporate policies and outcomes during the COVID-19 crisis: Does managerial ability matter? Pacific Basin Finance Journal, 73. https://doi.org/10.1016/j.pacfin.2022.101743
Jensen, M. C., Meckling, W. H., Benston, G., Canes, M., Henderson, D., Leffler, K., Long, J., Smith, C., Thompson, R., Watts, R., & Zimmerman, J. (1976). Theory of the Firm: Managerial Behavior, Agency Costs and Ownership Structure. In Journal of Financial Economics (Issue 4). Harvard University Press. http://hupress.harvard.edu/catalog/JENTHF.html
Koutoupis, A. G., Davidopoulos, L. G., Azibi, J., Hakimi, A., & Mansali, H. (2023). Greenhouse gas assurance, board diversity and cost of debt: a quantile approach. EuroMed Journal of Business. https://doi.org/10.1108/EMJB-10-2022-0190
Kusnanto, E., Kasih, S., & Jakarta, B. (2023). JOURNAL OF INFORMATION SYSTEMS AND MANAGEMENT INFLUENCE OF INTELLECTUAL CAPITAL AND INSTITUTIONAL OWNERSHIP AT FINANCIAL DISTRESS WITH CASH FLOW OPERATING AS INTERVENING VARIABLE. https://jisma.org
Kusuma Wardani, D., Dwi Sari Rumahorbo Program Studi Akuntansi, H., & Ekonomi Universitas Sarjanawiyata Tamansiswa Yogyakarta, F. (n.d.). PENGARUH PENGHINDARAN PAJAK, TATA KELOLA DAN KARAKTERISTIK PERUSAHAAN TERHADAP BIAYA HUTANG. https://doi.org/10.24964/ja.v6i2.691
Lin, S.-Y., Hsu, C.-C., & Chang, J.-C. (2023). The Study of Corporate Social Responsibility and Ownership Structure on Bank’s Financial Performance in Taiwan. Advances in Management and Applied Economics, 321–334. https://doi.org/10.47260/amae/13616
Lyu, Y., Ji, Z., Zhang, X., & Zhan, Z. (2023). Can Fintech Alleviate the Financing Constraints of Enterprises?—Evidence from the Chinese Securities Market. Sustainability (Switzerland), 15(5). https://doi.org/10.3390/su15053876
Mariani. (n.d.). 1431-3793-1-SM.
Mulya Ningrum, G. (2023). Does The Investment Opportunity Set Strengthen The Effect of Profitability, Managerial Ownership and Capital Structure on Firm Value? Journal of Business, Social and Technology CV. Syntax Corporation Indonesia Journal of Business, Social and Technology, 4(1). https://doi.org/10.46799/jbt.v4i1.130
Myers, S. C., & Majiuf, N. S. (1981). CORPORATE FINANCING AND INVESTMENT DECISIONS WHEN FIRMS HAVE INFORMATION THE INVESTORS DO NOT HAVE.
Onjewu, A. K. E., Walton, N., & Koliousis, I. (2023). Blockchain agency theory. Technological Forecasting and Social Change, 191. https://doi.org/10.1016/j.techfore.2023.122482
Profitabilitas, A. P., Manajerial, K., Deviden, K., Ukuran, D., Terhadap, P., Hutang, K., Setiyani, S. D., & Sudarsi, S. (2023). SEIKO : Journal of Management & Business. SEIKO : Journal of Management & Business, 6(1), 889–901. https://doi.org/10.37531/sejaman.v6i1.3096
Putri, N. S., & Dillak, V. J. (2023). Pengaruh Ukuran Perusahaan, Non Debt Tax Shield, Tangibility Assets Dan Kepemilikan Institusional Terhadap Struktur Modal (Studi pada Perusahaan Sektor Properti dan Real Estate yang Terdaftar di BursaEfek Indonesia Periode 2017-2020) (Vol. 10, Issue 2).
Rahmawati, A., & Garad, A. (2023). Managerial Ownership, Leverage, Dividend Policy, Free Cash Flow, Firm Value: Evidence in Indonesia Stock Exchange. European Journal of Studies in Management and Business, 25, 32–44. https://doi.org/10.32038/mbrq.2023.25.03
Sakala, J. C., & Hapompwe, C. (2023). Analyzing Small and Medium Enterprises’ Perception towards Private Equity as an Alternative Source of Finance in Lusaka District. JOURNAL OF ECONOMICS, FINANCE AND MANAGEMENT STUDIES, 06(01). https://doi.org/10.47191/jefms/v6-i1-38
Setianingsih Nurohmah, W. (2023). The effect of company growth, asset structure, and profitability on debt policy. 1, 167–173. https://doi.org/10.20885/InCAF.vol1.art19
Thanatawee, Y. (2023). Institutional ownership and cost of debt: evidence from Thailand. Cogent Business and Management, 10(2). https://doi.org/10.1080/23311975.2023.2207693
Tri Amanda, S., Akhyar, C., & Nur Ilham, R. (n.d.). THE EFFECT OF INFLATION, EXCHANGE EXCHANGE, INTEREST RATE ON STOCK PRICE IN THE TRANSPORTATION SUB-SECTOR, 2018-2020. https://jaruda.org
Trikartika Gustyana, T., & Putri Hanari, S. (n.d.). PENGARUH CORPORATE GOVERNANCE TERHADAP STRUKTUR MODAL PADA SEKTOR BARANG KONSUMEN NON-PRIMER YANG TERDAFTAR DI BEI. 6(3), 2022.
Wahyu, E., & Budianto, H. (n.d.). Dividend Payout Ratio (DPR) in Islamic and Conventional Banking: Mapping Research Topics using VOSviewer Bibliometric and Library Research. https://doi.org/10.5281/zenodo.10117564
Wei, H., Xie, E., & Gao, J. (2024). R&D Investment and Debt Financing of High-Tech Firms in Emerging Economies: The Role of Patents and State Ownership. IEEE Transactions on Engineering Management, 71, 753–770. https://doi.org/10.1109/TEM.2021.3133330
Yahaya, O. A., Agbi, S., Tnushi, P. T., Adabenege, O., Phd, Y., Eniola, S., & Phd, A. (2023). Ownership Structure and Dividend Policy of Listed Deposit Money Banks in Nigeria. International Journal of Management Science and Business Administration, 1(0), 8–82. https://doi.org/10.18775/ijmsba.1849-5664-5419.2023.91.1004
Zhitao, W., & Xiang, M. (2023). Financial mismatch on corporate debt default risk: Evidence from China. Pacific Basin Finance Journal, 80. https://doi.org/10.1016/j.pacfin.2023.102077
Published
2024-03-15
How to Cite
Leo Dadyo PamungkasB. L. B. B. M. (2024). THE EFFECT OF MANAGERIAL OWNERSHIP AND INSTITUTIONAL OWNERSHIP ON DEBT POLICY : EVIDENCE FROM MANUFACTURING FIRM LISTED ON INDONESIA STOCK EXCHANGE. Journal Competency of Business, 7(02), 90-110. https://doi.org/10.47200/jcob.v7i02.2300
Section
Articles
Published By: