The Effect of Specific Macroeconomic and Internal Company Variables on the Capital Structure of Manufacturing Listed Companies in the Indonesia Stock Exchange

Abstract

External and internal factors can affect a company's capital structure. Managers cannot limit the macroeconomic component of external factors, while a company can monitor internal factors and their effects. This study aims to determine the effect of specific macroeconomic variables, namely, Interest Rates, Inflation Rates, GDP, and company internal variables, namely, Return on Assets (ROA), Tangible Assets (TAN), and Firm Size (SIZE) on Capital Structure (DER) of food and beverage sub-sector manufacturing companies in the Indonesia Stock Exchange. This research is associative research, and the data type used is quantitative. The data is obtained from the company's financial statements audited on the Indonesia Stock Exchange during the study period. The analytical method used is descriptive analysis and panel data regression. The population of this study is the food and beverage sub-sector manufacturing companies for the period 2017-2021, totaling 62 companies. The sample in this study amounted to 27 companies. The results of this study indicate that simultaneously, Interest Rates, Inflation Rates, GDP, ROA, TAN, and SIZE have a significant effect on DER in food and beverage sub-sector manufacturing companies on the Indonesia Stock Exchange in the 2017-2021 period. Partially, the Interest Rate and TAN variables have a positive and insignificant effect on DER. The inflation rate variable positively and significantly affects DER at = 0.1. The SIZE variable has a positive and significant effect on DER. The GDP variable has a negative and insignificant effect on DER. In contrast, the ROA variable positively and significantly affects DER at = 0.1 in food and beverage sub-sector manufacturing companies on the Indonesia Stock Exchange.