Moderating effects of corporate governance mechanism on the relation between capital structure and firm performance

The purpose of this study is to examine the moderating effect of corporate governance on the relationship between capital structure and firm performance. This study uses secondary data in the form of financial reports at the end of 2019 from micro-financial institutions (rural banks) with a total of...

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Autores principales:	Ngatno, Endang P. Apriatni, Arief Youlianto
Formato:	article
Lenguaje:	EN
Publicado:	Taylor & Francis Group 2021
Materias:	capital structure board size board of commissioners ownership concentration performance Business HF5001-6182 Management. Industrial management HD28-70
Acceso en línea:	https://doaj.org/article/33ba1e804d0f443cbef0dcf0f29b5a18
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id	oai:doaj.org-article:33ba1e804d0f443cbef0dcf0f29b5a18
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spelling	oai:doaj.org-article:33ba1e804d0f443cbef0dcf0f29b5a182021-12-02T15:22:17ZModerating effects of corporate governance mechanism on the relation between capital structure and firm performance2331-197510.1080/23311975.2020.1866822https://doaj.org/article/33ba1e804d0f443cbef0dcf0f29b5a182021-01-01T00:00:00Zhttp://dx.doi.org/10.1080/23311975.2020.1866822https://doaj.org/toc/2331-1975The purpose of this study is to examine the moderating effect of corporate governance on the relationship between capital structure and firm performance. This study uses secondary data in the form of financial reports at the end of 2019 from micro-financial institutions (rural banks) with a total of 506 units. Data were analyzed using the Moderated Regression Analysis. Results indicate that capital structure financing decisions have a positive contribution to financial performance. However, this only applies to short-term debt. Otherwise, long-term debt has a negative and insignificant effect on both return on assets and return on equity. These results support the view of the pecking order theory, as empirical evidence that the opposite effect between firm profits and capital structure. The results of the moderation analysis show that only the size of the board of commissioners can strengthen the relationship between capital structure and company performance, while board size and ownership concentration are not able to moderate the relationship between capital structure and company performance.NgatnoEndang P. ApriatniArief YouliantoTaylor & Francis Grouparticlecapital structureboard sizeboard of commissionersownership concentrationperformanceBusinessHF5001-6182Management. Industrial managementHD28-70ENCogent Business & Management, Vol 8, Iss 1 (2021)
institution	DOAJ
collection	DOAJ
language	EN
topic	capital structure board size board of commissioners ownership concentration performance Business HF5001-6182 Management. Industrial management HD28-70
spellingShingle	capital structure board size board of commissioners ownership concentration performance Business HF5001-6182 Management. Industrial management HD28-70 Ngatno Endang P. Apriatni Arief Youlianto Moderating effects of corporate governance mechanism on the relation between capital structure and firm performance
description	The purpose of this study is to examine the moderating effect of corporate governance on the relationship between capital structure and firm performance. This study uses secondary data in the form of financial reports at the end of 2019 from micro-financial institutions (rural banks) with a total of 506 units. Data were analyzed using the Moderated Regression Analysis. Results indicate that capital structure financing decisions have a positive contribution to financial performance. However, this only applies to short-term debt. Otherwise, long-term debt has a negative and insignificant effect on both return on assets and return on equity. These results support the view of the pecking order theory, as empirical evidence that the opposite effect between firm profits and capital structure. The results of the moderation analysis show that only the size of the board of commissioners can strengthen the relationship between capital structure and company performance, while board size and ownership concentration are not able to moderate the relationship between capital structure and company performance.
format	article
author	Ngatno Endang P. Apriatni Arief Youlianto
author_facet	Ngatno Endang P. Apriatni Arief Youlianto
author_sort	Ngatno
title	Moderating effects of corporate governance mechanism on the relation between capital structure and firm performance
title_short	Moderating effects of corporate governance mechanism on the relation between capital structure and firm performance
title_full	Moderating effects of corporate governance mechanism on the relation between capital structure and firm performance
title_fullStr	Moderating effects of corporate governance mechanism on the relation between capital structure and firm performance
title_full_unstemmed	Moderating effects of corporate governance mechanism on the relation between capital structure and firm performance
title_sort	moderating effects of corporate governance mechanism on the relation between capital structure and firm performance
publisher	Taylor & Francis Group
publishDate	2021
url	https://doaj.org/article/33ba1e804d0f443cbef0dcf0f29b5a18
work_keys_str_mv	AT ngatno moderatingeffectsofcorporategovernancemechanismontherelationbetweencapitalstructureandfirmperformance AT endangpapriatni moderatingeffectsofcorporategovernancemechanismontherelationbetweencapitalstructureandfirmperformance AT ariefyoulianto moderatingeffectsofcorporategovernancemechanismontherelationbetweencapitalstructureandfirmperformance
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Moderating effects of corporate governance mechanism on the relation between capital structure and firm performance

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