Determinants of capital structures based on the Pecking Order Theory and Trade-off Theory

Hotman Jefferson Simatupang (Master Program of Accounting, Faculty of Economics and Business, University of Brawijaya Jl. M.T. Haryono No.165 Malang, 65145)
Lilik Purwanti (Master Program of Accounting, Faculty of Economics and Business, University of Brawijaya Jl. M.T. Haryono No.165 Malang, 65145)
Endang Mardiati (Master Program of Accounting, Faculty of Economics and Business, University of Brawijaya Jl. M.T. Haryono No.165 Malang, 65145)

Jurnal Keuangan dan Perbankan
Vol 23, No 1 (2019): January 2019

Determining the decision of the company's capital structure is a very important thing because it influences the development of resources potency and the sustainability of a company. Related to deciding on the capital structure, there is still a different perception so far between pecking order theory and trade-off theory. This research aims to know the effect of profitability, sales growth, non-debt tax shield, the tangibility of assets, and funding surplus towards the capital structure of non-financial companies listed in Indonesia Stock Exchange (IDX) period 2014-2017. The research method used was Causal-Comparative Research with samples investigated were panel data of 154 non-financial companies experiencing funding surplus with total observation in the amount of 616. The result of this research shows that non-debt tax shield and growth sales do not affect the company's capital structure. Besides that, funding surplus has a positive effect on the capital structure, while profitability and tangibility assets have a negative effect on the capital structure.JEL Classification: C33, G02, G32DOI: https://doi.org/10.26905/jkdp.v23i1.2579