Macroeconomic Risk, Idiosyncratic Risk, and Corporate Leverage: Policy Implications for Financial Governance in Indonesia
Abstract
This study examines the influence of macroeconomic and firm-specific risks on the leverage of publicly listed Indonesian manufacturing and non-financial service firms. It also breaks down the divergence between sectors of risk responsiveness, which, in the capital structure literature for emerging markets, remains mostly uninvestigated. Using a sample of 99 publicly listed firms on the Indonesia Stock Exchange (IDX) from 2010 to 2019, we apply an Instrumental Variable (IV) and system- GMM estimator to control for endogeneity. The findings suggest that increasing macroeconomic risk and reducing firm-specific risk induces leverage, especially among service firms. These results also have policy implications for guiding firms in aligning their finance strategies to the sectoral risk they face and for assisting in formulating tailored policies that maintain robustness in the form of financial industry stability and corporate growth.
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References
Akhtar, S. (2012). Capital Structure and Business Cycles. Accounting & Finance, 52(s1), 25–48.
Arcand, J.L., Berkes, E., & Panizza, U. (2011). Too Much Finance? Mimeo. Internasional Monetary Fund Working Paper 9-16.
Arellano, M., & Bond, S. (1991). Some tests of specification for panel data: Monte Carlo evidence and an application to employment equations. The review of economic studies, 58(2), 277-297.
Bambang, H., Heru A., & Harmadi. (2018). Determinan struktur modal perusahaan di negara-negara asia tenggara. Jurnal Siasat Bisnis, 22(2), 144-163.
Bartram, S. (2002). The Interest Rate Exposure of Nonfinancial Corporations. European Financial Review, 6(1) 101–25.
Baum, C. F., Stephan, A., & Talavera, O. (2009). The effects of uncertainty on the leverage of nonfinancial firms. Economic Inquiry, 47(2), 216-225.
Baum, C. F., M. Caglayan, & O. Talavera. (2010). On the Sensitivity of Firms' Investment to Cash Flow and Uncertainty. Oxford Economic Papers, 62(2), 186–306.
Bevan, A., & Danbo t , J. (2004). Test ing for inconsistencies in the estimation of UK capital structure determinants. Applied Financial Economics, 14(1), 55–66. https://doi.org/10.1080/0960310042000164220
Bhamra H. S., L. A. Kuehn, & I. A. Strebulaev. (2010). The Aggregate Dynamics of Capital Structure and Macroeconomic Risk. Review of Financial Studies, 23(12), 4187–241.
Blundell, R., & Bond, S. (1998). Initial conditions and moment restrictions in dynamic panel data models. Journal of econometrics, 87(1), 115-143.
Caglayan, M., & Rashid, A. (2014). The Respones of Firms Leverage to Risk. Evidence from UK Public Versus NonPublic Manufacturing Firms. Economic Inquiry, 52(1), 341-363
Cahyono, & Chawla. (2019). The determinants of firm financing structures across sectors: evidence from Indonesian listed companies. Investment Management and Financial Innovations, 16(1), 100-118
Chandra, Prasanna. (2008). Financial Management, Theory and Practice. New Delhi. Tata McGraw-Hill Education.
Chu, Wu, and Chiou. (1992). The Determinants of Corporate Capital Structure Choice: Taiwan Evidence. Journal of Management Science, 9(2), 159–77.
Crutchley, C. E., & R. S. Hansen. (1989). A Test of the Agency Theory of Managerial Ownership, Corporate Leverage, and Corporate Dividends. Financial Management, 18(4), 36–46.
De Jong, A., Kabir, R., & Nguyen, T. T. (2008). Capital structure around the world: The roles of firm- and country-specific determinants. Journal of Banking & Finance, 32(9), 1954-1969.
Elkhal K. (2019). Business uncertainty and financial leverage: should the firm double up on risk?. Managerial Finance, 45(4), 536-544.
Elok, S. U. (2017). The effect of the crisis on financial performance of property sector in Indonesia. Investment Management and Financial Innovations, 14(1-1), 248-253. https://doi.org/10.21511/imfi.14(1-1).2017.11
Elsas, R., Flannery, M. J., & Garfinkel, J. A. (2014). Financing major investments: information about capital structure decisions. Review of finance, 18(4), 1341- 1386. https://doi.org/10.1093/rof/ rft036
Fabrizio C., Nigel D., Sarmistha P., & Isabelle R. (2012). When does leverage hurt productivity growth? A firm-level analysis. Journal of International Money and Finance, 31, 1674–1694
Fama, E. F., & French, K. R. (2002). Testing trade-off and pecking order predictions about dividends and debt. The review of financial studies, 15(1), 1-33.
Faulkender, M., & Petersen. (2006). Does the Source of Capital Affect Capital Structure?. Review of Financial Studies, 19(1). 45-79
F., Baum C., A. Stephan, & O. Talavera. (2009). The Effects of Uncertainty on the Leverage of Nonfinancial Firms. Economic Inquiry, 47(2), 216–25.
Frank, M. Z., & Goyal, V. K. (2008). Trade-off and pecking order theories of debt. In Handbook of empirical corporate finance (pp. 135-202). Elsevier.
Gertler, M., & R. G. Hubbard. (1993). Corporate Financial Policy, Taxation, and Macroeconomic Risk. Rand Journal of Economics, 24(2), 286–303.
Graham, J. R., & M. T. Leary. (2011). A Review of Empirical Capital Structure Research and Directions for the Future. Annual Review of Financial Economics, 3(1), 309–45.
Gregory Phelan. (2012). Financial Intermediation, Leverage, and Macroeconomic Instability. American Economic Journal: Macroeconomics, 8(4), 199–224 https://doi.org/10.1257/mac.20140233
Hackbarth, D.J. Miao, & E. Morellec. (2006). Capital Structure, Credit Risk, and Macroeconomic Conditions. Journal of Financial Economics, 82(3) 519–50.
Hall, G. C., P. J. Hutchinson, & N. Michaelas. (2004). Determinants of the Capital Structures of European SMEs. Journal of Business Finance & Accounting, 31(5-6), 711–28.
Harris, M., & A. Raviv. (1991). The Theory of Capital Structure. Journal of Finance 46, no. 1:297–355.
Hart, O., & Moore, J. (1995). Debt and seniority: An analysis of the role of hard claims in constraining management. American Economic Review, 85(3), 567– 585.
Hatzinikolaou, D., G. M. Katsimbris, & A. G. Noulas. (2002). Inflation Uncertainty and Capital Structure: Evidence from a Pooled Sample of the Dow-Jones Industrial Firms. International Review of Economics & Finance, 11(1), 45–55.
Hennessy, C. A., & T. M. Whited. (2005). Debt Dynamics. Journal of Finance, 60(3), 1129–65.
Heyman, D., & Ooghe. (2008). The Financial Structure of Private Held Belgian Firms. Small Business Economics, 30(3), 301–13.
Hovakimian, A., Opler, T., & Titman, S. (2001). The debt-equity choice. Journal of Financial and Quantitative analysis, 36(1), 1-24.
Huang, R., & J. R. Ritter. (2009). Testing Theories of Capital Structure and Estimating the Speed of Adjustment. Journal of Financial and Quantitative Analysis, 44(2), 237–71.
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. https://doi.org/10.1016/0304-405X(76)90026-X
Kale, J. R., T. H. Noe, & G. G. Ramirez. (1991). The Effect of Business Risk on Corporate Capital Structure: Theory and Evidence. Journal of Finance, 46(5), 1693–715.
Kartikasari, D., & Merianti, M. (2016). The effect of leverage and firm size to profitability of public manufacturing companies in Indonesia. International Journal of Economics and Financial Issues, 6(2), 409-413
Kayhan, A., & Titman, S. (2007). Firms' histories and their capital structures. Journal of Financial Economics, 83 (1), 1–32. https://doi.org/10.1016/j.jfineco.2005.10.007
Kim, W.S. & Sorensen, E. H. (1986), Evidence on the impact of agency costs of debt on corporate debt policy. Journal of Financial and Quantitative Analysis, 21(2), 131-144.
Kraus, A., & Litzenberger, R. H. (1973). A state- preference model of optimal financial leverage. The Journal of Finance, 28(4), 911–922.
K., MacKie-Mason J. (1990). Do Taxes Affect Corporate Financing Decisions?. Journal of Finance, 45(5), 1471–93.
K., Wald J. (1999). How Firm Characteristics Affect Capital Structure: An International Comparison. Journal of Financial Research, 22(2), 161–87.
Kolasinski. (2009). Subsidiary Debt, Capital Structure, and Internal Capital Markets. Journal of Financial Economics, 94(2).
Korteweg, A. (2010). The net benefits to leverage. Journal of Finance, 65, 2137–2170.
Larry Li, & Silvia Z. I. (2019). Firm and industri specific determinants of capital structure: Evidence from the Australian market. International Review of Economics and Finance, 59, 425–437.
Law, S. & Singh, N., (2014). Does too much finance harm economic growth?. Journal of Banking and Finance, 41, 36-44
Leary, M. T., & Roberts, M. R. (2010). The pecking order, debt capacity, and information asymmetry. Journal of Financial Economics, 95(3), 332–355. https://doi.org/10.1016/j.jfineco.2009.10.009
Levy, A., & C. Hennessy. (2007). Why Does Capital Structure Choice Vary with Macroeconomic Conditions?. Journal of Monetary Economics, 54(6) 1545–64.
MacKie-Mason, J. K. (1990). Do Taxes Affect Corporate Financing Decisions?. Journal of Finance, 45(5), 1471–93.
Modiglani, F., & M.H Miller. (1958). The Cost of Capital, Corporation Finance and the Theory of Investment. American Economic Review, 48(3).
Moosa, I., & Li, L. (2012). Firm-specific factors as determinants of capital structure: Evidencefrom Indonesia. Review of Pacific Basin Financial Markets and Policies, 15(2), 1–17
Mouton, M., & Smith, N. (2016). Firm determinants of capital structure on the jse ltd and the influence of the 2008 financial crisis. Journal of economic and financial sciences, 9(3), 789-806.
Mueller, E. (2008). How Does Owners' Exposure to Idiosyncratic Risk Influence the Capital Structure of Private Companies?. Journal of Empirical Finance, 15(2), 185–98.
Mun, S. G., & Jang, S. S. (2015). Working capital, cash holding, and profitability of restaurant firms. International journal of hospitality management, 48, 1-11.
Myers, S. C. (1977). Determinants of Corporate Borrowing. Journal of Financial Economics, 5(2).
Myers, S. C. (1984). Finance theory and financial strategy. Interfaces, 14(1), 126-137.
Myers, S. (2001). Capital Structure. Journal of Economic Perspectives, 15(2), 81–102. https://doi.org/10.1257/jep.15.2.81
Myers, S. C., & Majluf, N. S. (1984). Corporate financing and investment decisions when firms have information that investors do not have. Journal of Financial Economics, 13(2), 187-221.
M., Gertler, & R. G. Hubbard. (1993). Corporate Financial Policy, Taxation, and Macroeconomic Risk. Rand Journal of Economics, 24(2), 286–303.
Oztekin. (2015). Capital structure decisions around the world: which factors are reliably important? Journal of financial and quantitative analysis, 50(3), 301-323.
Paramasivan, C & Subramanian, T. (2009). Financial Management. New Delhi: New Age International.
Puspitaningtyas, Z. (2017). Estimating systematic risk for the best investment decisions on manufacturing company in Indonesia. Investment management and financial innovations, 14(1), 46-54.
Qizam, I. (2017). On the causality analysis of the correlation between financial leverage and systematic risk: evidence from Indonesian Stock Exchange. Investment Management and Financial Innovations (open access), 14(4), 73-89
Rajan, R. G., & Zingales, L. (1995). What do we know about capital structure? Some evidence from international data. The journal of Finance, 50(5), 1421-1460.
Sastrosuwito, S., & Suzuki, Y. (2011). Post Crisis Indonesian Banking System Profitability: Bank Specific, Industri Specificand Macroeconomic Determinants. The 2nd International Research Symposium in Service management. Yogyakarta–Indonesia.
Shaferi, I., Laksana, R. D., & Wahyudi, S. (2018). The effect of risk leverage on investors' preferences in manufacturing companies listed on the Indonesia Stock Exchange. Investment management and financial innovations, 15(3), 190-198.
Sutomo, W. S., Pangestuti, I.R., & Muharram, H. (2019). Determinants of financing decision: empirical evidence on manufacturing firms in Indonesia. Investment Management & Financial Innovations, 16(2), 159-170.
Sutrisno. (2016). Struktur Modal: Faktor Penentu dan Pengaruhnya Pada Nilai Perusahaan. Jurnal Siasat Bisnis, 20(1), 70-89.
S., Akhtar. (2012). Capital Structure and Business Cycles. Accounting & Finance, 52(s1), 25–48.
S., Bhamra H., L. A. Kuehn, & I. A. Strebulaev. (2010). The Aggregate Dynamics of Capital Structure and Macroeconomic Risk. Review of Financial Studies, 23(12), 4187–241.
Titman, S., & Wessels, R. (1988). The determinants of capital structure choice. The Journal of finance, 43(1), 1-19.
Talavera, O., Caglayan, & Baum. (2010). Sensitivity of Firms' Investment to Cash Flow and Uncertainty. Oxford Economic Papers, 62(2), 186–306.
Wald, J. K. (1999). How Firm Characteristics Affect CapitalStructure: An International Comparison. Journal of Financial Research, 22(2), 161–87.
Widarti A.A & Sudana, I M. (2014). Pengaruh Karakteristik Perusahaan Terhadap Keputusan Pendanaan (Perbandingan Antar Sub Sektor Industri Manufaktur). Jurnal Siasat Bisnis, 17 (2), 190-201.
W., Drobetz, P. Pensa, & G. Wanzenried. (2007). Firm Characteristics, Economic Conditions and Capital Structure Adjustments. Working Paper 16/07, Wirtschaftswissenschaftliches Zentrum (WWZ) Der Universitate Basel.
Yudanto, N., & Setyawan, S. M. (1998). Dampak Krisis Moneter Terhadap Sektor Riil (Impact of Monetary Crisis on Real Sector). Buletin Ekonomi Moneter dan Perbankan, 1(2), 131-158.
Zafar, Q., Wongsurawat, W., & Camino, D. (2019). The Determinants of Leverage Decisions; Evidence from Asian Emerging Markets. Cogent Economics & Finance, 7, 1598836.
Arcand, J.L., Berkes, E., & Panizza, U. (2011). Too Much Finance? Mimeo. Internasional Monetary Fund Working Paper 9-16.
Arellano, M., & Bond, S. (1991). Some tests of specification for panel data: Monte Carlo evidence and an application to employment equations. The review of economic studies, 58(2), 277-297.
Bambang, H., Heru A., & Harmadi. (2018). Determinan struktur modal perusahaan di negara-negara asia tenggara. Jurnal Siasat Bisnis, 22(2), 144-163.
Bartram, S. (2002). The Interest Rate Exposure of Nonfinancial Corporations. European Financial Review, 6(1) 101–25.
Baum, C. F., Stephan, A., & Talavera, O. (2009). The effects of uncertainty on the leverage of nonfinancial firms. Economic Inquiry, 47(2), 216-225.
Baum, C. F., M. Caglayan, & O. Talavera. (2010). On the Sensitivity of Firms' Investment to Cash Flow and Uncertainty. Oxford Economic Papers, 62(2), 186–306.
Bevan, A., & Danbo t , J. (2004). Test ing for inconsistencies in the estimation of UK capital structure determinants. Applied Financial Economics, 14(1), 55–66. https://doi.org/10.1080/0960310042000164220
Bhamra H. S., L. A. Kuehn, & I. A. Strebulaev. (2010). The Aggregate Dynamics of Capital Structure and Macroeconomic Risk. Review of Financial Studies, 23(12), 4187–241.
Blundell, R., & Bond, S. (1998). Initial conditions and moment restrictions in dynamic panel data models. Journal of econometrics, 87(1), 115-143.
Caglayan, M., & Rashid, A. (2014). The Respones of Firms Leverage to Risk. Evidence from UK Public Versus NonPublic Manufacturing Firms. Economic Inquiry, 52(1), 341-363
Cahyono, & Chawla. (2019). The determinants of firm financing structures across sectors: evidence from Indonesian listed companies. Investment Management and Financial Innovations, 16(1), 100-118
Chandra, Prasanna. (2008). Financial Management, Theory and Practice. New Delhi. Tata McGraw-Hill Education.
Chu, Wu, and Chiou. (1992). The Determinants of Corporate Capital Structure Choice: Taiwan Evidence. Journal of Management Science, 9(2), 159–77.
Crutchley, C. E., & R. S. Hansen. (1989). A Test of the Agency Theory of Managerial Ownership, Corporate Leverage, and Corporate Dividends. Financial Management, 18(4), 36–46.
De Jong, A., Kabir, R., & Nguyen, T. T. (2008). Capital structure around the world: The roles of firm- and country-specific determinants. Journal of Banking & Finance, 32(9), 1954-1969.
Elkhal K. (2019). Business uncertainty and financial leverage: should the firm double up on risk?. Managerial Finance, 45(4), 536-544.
Elok, S. U. (2017). The effect of the crisis on financial performance of property sector in Indonesia. Investment Management and Financial Innovations, 14(1-1), 248-253. https://doi.org/10.21511/imfi.14(1-1).2017.11
Elsas, R., Flannery, M. J., & Garfinkel, J. A. (2014). Financing major investments: information about capital structure decisions. Review of finance, 18(4), 1341- 1386. https://doi.org/10.1093/rof/ rft036
Fabrizio C., Nigel D., Sarmistha P., & Isabelle R. (2012). When does leverage hurt productivity growth? A firm-level analysis. Journal of International Money and Finance, 31, 1674–1694
Fama, E. F., & French, K. R. (2002). Testing trade-off and pecking order predictions about dividends and debt. The review of financial studies, 15(1), 1-33.
Faulkender, M., & Petersen. (2006). Does the Source of Capital Affect Capital Structure?. Review of Financial Studies, 19(1). 45-79
F., Baum C., A. Stephan, & O. Talavera. (2009). The Effects of Uncertainty on the Leverage of Nonfinancial Firms. Economic Inquiry, 47(2), 216–25.
Frank, M. Z., & Goyal, V. K. (2008). Trade-off and pecking order theories of debt. In Handbook of empirical corporate finance (pp. 135-202). Elsevier.
Gertler, M., & R. G. Hubbard. (1993). Corporate Financial Policy, Taxation, and Macroeconomic Risk. Rand Journal of Economics, 24(2), 286–303.
Graham, J. R., & M. T. Leary. (2011). A Review of Empirical Capital Structure Research and Directions for the Future. Annual Review of Financial Economics, 3(1), 309–45.
Gregory Phelan. (2012). Financial Intermediation, Leverage, and Macroeconomic Instability. American Economic Journal: Macroeconomics, 8(4), 199–224 https://doi.org/10.1257/mac.20140233
Hackbarth, D.J. Miao, & E. Morellec. (2006). Capital Structure, Credit Risk, and Macroeconomic Conditions. Journal of Financial Economics, 82(3) 519–50.
Hall, G. C., P. J. Hutchinson, & N. Michaelas. (2004). Determinants of the Capital Structures of European SMEs. Journal of Business Finance & Accounting, 31(5-6), 711–28.
Harris, M., & A. Raviv. (1991). The Theory of Capital Structure. Journal of Finance 46, no. 1:297–355.
Hart, O., & Moore, J. (1995). Debt and seniority: An analysis of the role of hard claims in constraining management. American Economic Review, 85(3), 567– 585.
Hatzinikolaou, D., G. M. Katsimbris, & A. G. Noulas. (2002). Inflation Uncertainty and Capital Structure: Evidence from a Pooled Sample of the Dow-Jones Industrial Firms. International Review of Economics & Finance, 11(1), 45–55.
Hennessy, C. A., & T. M. Whited. (2005). Debt Dynamics. Journal of Finance, 60(3), 1129–65.
Heyman, D., & Ooghe. (2008). The Financial Structure of Private Held Belgian Firms. Small Business Economics, 30(3), 301–13.
Hovakimian, A., Opler, T., & Titman, S. (2001). The debt-equity choice. Journal of Financial and Quantitative analysis, 36(1), 1-24.
Huang, R., & J. R. Ritter. (2009). Testing Theories of Capital Structure and Estimating the Speed of Adjustment. Journal of Financial and Quantitative Analysis, 44(2), 237–71.
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. https://doi.org/10.1016/0304-405X(76)90026-X
Kale, J. R., T. H. Noe, & G. G. Ramirez. (1991). The Effect of Business Risk on Corporate Capital Structure: Theory and Evidence. Journal of Finance, 46(5), 1693–715.
Kartikasari, D., & Merianti, M. (2016). The effect of leverage and firm size to profitability of public manufacturing companies in Indonesia. International Journal of Economics and Financial Issues, 6(2), 409-413
Kayhan, A., & Titman, S. (2007). Firms' histories and their capital structures. Journal of Financial Economics, 83 (1), 1–32. https://doi.org/10.1016/j.jfineco.2005.10.007
Kim, W.S. & Sorensen, E. H. (1986), Evidence on the impact of agency costs of debt on corporate debt policy. Journal of Financial and Quantitative Analysis, 21(2), 131-144.
Kraus, A., & Litzenberger, R. H. (1973). A state- preference model of optimal financial leverage. The Journal of Finance, 28(4), 911–922.
K., MacKie-Mason J. (1990). Do Taxes Affect Corporate Financing Decisions?. Journal of Finance, 45(5), 1471–93.
K., Wald J. (1999). How Firm Characteristics Affect Capital Structure: An International Comparison. Journal of Financial Research, 22(2), 161–87.
Kolasinski. (2009). Subsidiary Debt, Capital Structure, and Internal Capital Markets. Journal of Financial Economics, 94(2).
Korteweg, A. (2010). The net benefits to leverage. Journal of Finance, 65, 2137–2170.
Larry Li, & Silvia Z. I. (2019). Firm and industri specific determinants of capital structure: Evidence from the Australian market. International Review of Economics and Finance, 59, 425–437.
Law, S. & Singh, N., (2014). Does too much finance harm economic growth?. Journal of Banking and Finance, 41, 36-44
Leary, M. T., & Roberts, M. R. (2010). The pecking order, debt capacity, and information asymmetry. Journal of Financial Economics, 95(3), 332–355. https://doi.org/10.1016/j.jfineco.2009.10.009
Levy, A., & C. Hennessy. (2007). Why Does Capital Structure Choice Vary with Macroeconomic Conditions?. Journal of Monetary Economics, 54(6) 1545–64.
MacKie-Mason, J. K. (1990). Do Taxes Affect Corporate Financing Decisions?. Journal of Finance, 45(5), 1471–93.
Modiglani, F., & M.H Miller. (1958). The Cost of Capital, Corporation Finance and the Theory of Investment. American Economic Review, 48(3).
Moosa, I., & Li, L. (2012). Firm-specific factors as determinants of capital structure: Evidencefrom Indonesia. Review of Pacific Basin Financial Markets and Policies, 15(2), 1–17
Mouton, M., & Smith, N. (2016). Firm determinants of capital structure on the jse ltd and the influence of the 2008 financial crisis. Journal of economic and financial sciences, 9(3), 789-806.
Mueller, E. (2008). How Does Owners' Exposure to Idiosyncratic Risk Influence the Capital Structure of Private Companies?. Journal of Empirical Finance, 15(2), 185–98.
Mun, S. G., & Jang, S. S. (2015). Working capital, cash holding, and profitability of restaurant firms. International journal of hospitality management, 48, 1-11.
Myers, S. C. (1977). Determinants of Corporate Borrowing. Journal of Financial Economics, 5(2).
Myers, S. C. (1984). Finance theory and financial strategy. Interfaces, 14(1), 126-137.
Myers, S. (2001). Capital Structure. Journal of Economic Perspectives, 15(2), 81–102. https://doi.org/10.1257/jep.15.2.81
Myers, S. C., & Majluf, N. S. (1984). Corporate financing and investment decisions when firms have information that investors do not have. Journal of Financial Economics, 13(2), 187-221.
M., Gertler, & R. G. Hubbard. (1993). Corporate Financial Policy, Taxation, and Macroeconomic Risk. Rand Journal of Economics, 24(2), 286–303.
Oztekin. (2015). Capital structure decisions around the world: which factors are reliably important? Journal of financial and quantitative analysis, 50(3), 301-323.
Paramasivan, C & Subramanian, T. (2009). Financial Management. New Delhi: New Age International.
Puspitaningtyas, Z. (2017). Estimating systematic risk for the best investment decisions on manufacturing company in Indonesia. Investment management and financial innovations, 14(1), 46-54.
Qizam, I. (2017). On the causality analysis of the correlation between financial leverage and systematic risk: evidence from Indonesian Stock Exchange. Investment Management and Financial Innovations (open access), 14(4), 73-89
Rajan, R. G., & Zingales, L. (1995). What do we know about capital structure? Some evidence from international data. The journal of Finance, 50(5), 1421-1460.
Sastrosuwito, S., & Suzuki, Y. (2011). Post Crisis Indonesian Banking System Profitability: Bank Specific, Industri Specificand Macroeconomic Determinants. The 2nd International Research Symposium in Service management. Yogyakarta–Indonesia.
Shaferi, I., Laksana, R. D., & Wahyudi, S. (2018). The effect of risk leverage on investors' preferences in manufacturing companies listed on the Indonesia Stock Exchange. Investment management and financial innovations, 15(3), 190-198.
Sutomo, W. S., Pangestuti, I.R., & Muharram, H. (2019). Determinants of financing decision: empirical evidence on manufacturing firms in Indonesia. Investment Management & Financial Innovations, 16(2), 159-170.
Sutrisno. (2016). Struktur Modal: Faktor Penentu dan Pengaruhnya Pada Nilai Perusahaan. Jurnal Siasat Bisnis, 20(1), 70-89.
S., Akhtar. (2012). Capital Structure and Business Cycles. Accounting & Finance, 52(s1), 25–48.
S., Bhamra H., L. A. Kuehn, & I. A. Strebulaev. (2010). The Aggregate Dynamics of Capital Structure and Macroeconomic Risk. Review of Financial Studies, 23(12), 4187–241.
Titman, S., & Wessels, R. (1988). The determinants of capital structure choice. The Journal of finance, 43(1), 1-19.
Talavera, O., Caglayan, & Baum. (2010). Sensitivity of Firms' Investment to Cash Flow and Uncertainty. Oxford Economic Papers, 62(2), 186–306.
Wald, J. K. (1999). How Firm Characteristics Affect CapitalStructure: An International Comparison. Journal of Financial Research, 22(2), 161–87.
Widarti A.A & Sudana, I M. (2014). Pengaruh Karakteristik Perusahaan Terhadap Keputusan Pendanaan (Perbandingan Antar Sub Sektor Industri Manufaktur). Jurnal Siasat Bisnis, 17 (2), 190-201.
W., Drobetz, P. Pensa, & G. Wanzenried. (2007). Firm Characteristics, Economic Conditions and Capital Structure Adjustments. Working Paper 16/07, Wirtschaftswissenschaftliches Zentrum (WWZ) Der Universitate Basel.
Yudanto, N., & Setyawan, S. M. (1998). Dampak Krisis Moneter Terhadap Sektor Riil (Impact of Monetary Crisis on Real Sector). Buletin Ekonomi Moneter dan Perbankan, 1(2), 131-158.
Zafar, Q., Wongsurawat, W., & Camino, D. (2019). The Determinants of Leverage Decisions; Evidence from Asian Emerging Markets. Cogent Economics & Finance, 7, 1598836.
Published
2025-09-11
How to Cite
SAATARI, Amirmahmud; AULIA FALIANTY, Telisa.
Macroeconomic Risk, Idiosyncratic Risk, and Corporate Leverage: Policy Implications for Financial Governance in Indonesia.
, [S.l.], v. 9, n. 3, p. 350-364, sep. 2025.
Available at: <http://www.journal.iapa.or.id/pgr/article/view/1195>. Date accessed: 26 sep. 2025.
doi: https://doi.org/10.30589/pgr.v9i3.1195.
Section
Articles
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