The Effect of Capital Structure on Company Financial Performance

Nini Nini, Universitas Negeri Padang, Indonesia
Dina Patrisia, Universitas Negeri Padang, Indonesia
Agus Nurofik, STIE Perdagangan, Indonesia


Abstract: This study aims to examine the effect of capital structure on the company's financial performance particularly in manufacturing companies listed on the Indonesia Stock Exchange for the 4 years period from 2014 to 2018. Capital structure is measured by Market Total Leverage (MTLEV), Market Long-Term Leverage (MLLEV) and Market Short-Term Leverage (MSLEV). On the other hand, the company's financial performance is measured by Return on Equity (ROE) and Price to Book Value (PBV). The populations in this study are manufacturing companies listed on the Indonesia Stock Exchange and the selection of samples was determined by purposive sampling method, with the final samples as many as 333 company-years. The type of data used is secondary data from IDX using multiple regression analysis methods. The results of the analysis show that the capital structure has negative and significant effect on the company's financial performance in each model.

Keywords: capital structure, company financial performance


Pengaruh Struktur Modal Terhadap Kinerja Keuangan Perusahaan

Abstrak: Penelitian ini bertujuan untuk menguji pengaruh struktur modal terhadap kinerja keuangan perusahaan pada perusahaan manufaktur yang terdaftar di Bursa Efek Indonesia periode 2014-2018. Struktur modal diukur dengan Market Total Leverage (MTLEV), Market Long-Term Leverage (MLLEV) dan Market Short-Term Leverage (MSLEV). Sementara kinerja keuangan perusahaan diukur dengan Return on Equity (ROE) dan Price to Book Value (PBV). Populasi pada penelitian ini adalah perusahaan manufaktur yang terdaftar di Bursa Efek Indonesia. Sampel ditentukan dengan metode purposive sampling, kemudian sampel akhir diperoleh sebanyak 333 perusahaan-tahun. Jenis data yang digunakan adalah data sekunder dari IDX dengan menggunakan metode analisis regresi berganda. Hasil analisis menunjukan bahwa struktur modal berpengaruh negatif dan signifikan terhadap kinerja keuangan perusahaan disetiap model.

Keywords: struktur modal, kinerja keuangan perusahaan



capital structure; company financial performance

Full Text:



Abidin, Z., Yusniar, M. W., & Ziyad, M. (2014). Pengaruh Struktur Modal, Kebijakan Dividen Dan Size Terhadap Nilai Perusahaan (Studi Pada Perusahaan Properti Di Bursa Efek Indonesia). Jurnal Wawasan Manajemen, 3(1), 91-102. doi:

Adekunle, O., & Kajola, S. O. (2010). Capital structure and firm performance: Evidence from Nigeria. European Journal of Economics, Finance and Administrative Sciences, (25), 70-82. Retrieved from

Cai, J., & Zhang, Z. (2011). Leverage change, debt overhang, and stock prices. Journal of Corporate Finance, 17(3), 391-402. doi:

Cuong, N. T., & Nguyen Thi, C. (2012). The Effect of Capital Structure on Firm Value for Vietnam's Seafood Processing Enterprises. International Research Journal of Finance and Economics, (89), 221-233. Retrieved from

David, D. F., & Olorunfemi, S. (2010). Capital Structure and Corporate Performance in Nigeria Petroleum Industry: Panel Data Analysis. Journal of Mathematics and Statistics, 6(2), 168-173. doi:

Dawar, V. (2014). Agency theory, capital structure and firm performance: some Indian evidence. Managerial Finance, 40(12), 1190-1206. Retrieved from

Detthamrong, U., Chancharat, N., & Vithessonthi, C. (2017). Corporate governance, capital structure and firm performance: Evidence from Thailand. Research in International Business and Finance, 42, 689-709. doi:

Fahmi, I. (2014). Analisis Laporan Keuangan (1 ed.). Bandung: Alfabeta.

Fischer, M. (2007). Saving and Investing. United State: AuthorHouse.

Fosu, S. (2013). Capital structure, product market competition and firm performance: Evidence from South Africa. The Quarterly Review of Economics and Finance, 53, 140-151. doi:

Jensen, M. C. (1986). Agency Costs of Free Cash Flow, Corporate Finance, and Takeovers. American Economic Review, 76(2), 323-329. Retrieved from

Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of Financial Economics, 3(4), 305-360. doi:

Kieschnick, R., & Moussawi, R. (2018). Firm age, corporate governance, and capital structure choices. Journal of Corporate Finance, 48, 597-614. doi:

Kraus, A., & Litzenberger, R. H. (1973). A State-Preference Model of Optimal Financial Leverage. Journal of Finance, 28(4), 911-922. doi:

Le, T. P. V., & Phan, T. B. N. (2017). Capital Structure and Firm Performance : Emperical Evidence from A Small Transition Country. Reaerch In International Business and Finance, 42, 710-726. doi:

Li, K., Niskanen, J., & Niskanen, M. (2018). Capital structure and firm performance in European SMEs: Does credit risk make a difference? Managerial Finance, 45(5), 582-601. doi:

Margaritis, D., & Psillaki, M. (2010). Capital structure, equity ownership and firm performance. Journal of Banking & Finance, 34, 621-632. doi:

Masa'deh, R. E., Alrowwad, A., Alkhalafat, F., Obeidat, B., & Abualooush, s. h. (2018). The Role of Corporate Social Responsibility in Enhancing Firm Performance from the Perspective of IT Employees in Jordanian Banking Sector: The Mediating Effect of Transformational Leadership. Modern Applied Science, 12, 1-26. doi:

Mehran, H. (1992). Executive Incentive Plans, Corporate Control, and Capital Structure. Journal of Financial and Quantitative Analysis, 27(4), 539-560. doi:

Myers, S. C. (1977). Determinants of corporate borrowing. Journal of Financial Economics, 5, 147-175. doi:

Myers, S. C. (1984). The Capital Structure Puzzle. The Journal of Finance, 39(3), 575-592. doi:

Park, K., & Jang, S. (2013). Capital structure, free cash flow, diversification and firm performance: A holistic analysis. International Journal of Hospitality Management, 33, 51-63. doi:

Sadeghian, N. S., Latifi, M., Soroush, S., & Aghabagher, Z. (2012). Debt Policy and Corporate Performance: Empirical Evidence from Tehran Stock Exchange Companies. International Journal of Economics and Finance, 4(11), 217-224. doi:

Santos, J., & Brito, L. (2012). Toward a Subjective Measurement Model for Firm Performance. BAR - Brazilian Administration Review, 9, 95-117. doi:

Shyu, J. (2013). Ownership structure, capital structure, and performance of group affiliation: Evidence from Taiwanese group‐affiliated firms. Managerial Finance, 39(4), 404-420. doi:

Vithessonthi, C., & Tongurai, J. (2015). The effect of leverage on performance: Domestically-oriented versus internationally-oriented firms. Research in International Business and Finance, 34, 265-280. doi:

Welch, I. (2004). Capital Structure and Stock Returns. Journal of Political Economy, 112, 106-131. doi:

Welch, I. (2011). Two Common Problems in Capital Structure Research: The Financial-Debt-To-Asset Ratio and Issuing Activity Versus Leverage Changes. International Review of Finance, 11(1), 1-17. doi:



  • There are currently no refbacks.

Archive, Citation & Indexing:

More archive, citation, & indexing...

Creative Commons License

This site is licensed under a Creative Commons Attribution 4.0 International License