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IJSTR >> Volume 8 - Issue 11, November 2019 Edition

International Journal of Scientific & Technology Research  
International Journal of Scientific & Technology Research

Website: http://www.ijstr.org

ISSN 2277-8616

Optimal Financial Leverage Determinants For Smes Capital Structure Decision Making: Empirical Evidence From Indonesia

[Full Text]



Isnaeni Rokhayati,Bambang Agus Pramuka,Sudarto



Company Characteristics, Characteristics of SME Owners/Managers, SME, and Leverage



The purpose of conducting this research is to determine the effect of company characteristics and the characteristics of SMEs owners on the targeted leverage. This research is a quantitative study in nature with a sample of research is SMEs located in Banyumas Regency, Central Java, Indonesia. This study employed multiple linear regression analysis with e-views (econometric views) program on panel data as a statistical approach. The results showed that the variable of growth rate, company size, liquidity, and asset structure significantly influence the leverage of SMEs. Further, profitability has a negative effect but not significant on SMEs leverage. While the variable characteristics of SME owners also have an impact on SMEs leverage. Results of statistical analysis also show that variables such as knowledge, experience, and risk propensity have a significant effect on SMEs leverage. Finally, gender differences statistically have no significant effect on the SMEs leverage The results of this study are expected to provide information for SME owners about factors that influence corporate leverage decisions in terms of company characteristics and characteristics of SME owners/managers.



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