Factors influencing capital structure: Evidence from Indonesia capital market

This paper observes factors influencing capital structure in Indonesia capital market. This paper uses panel regression data of listed firms in Indonesia Stock Exchange (IDX) from year 2009 to 2011. The results show that source of debt, profitability, firm size, firm age and tangibility affect capital structure positively. The study suggests that variability of leverage in Indonesian capital market under period of 2009 to 2011 is in line with trade off theory that firm always restructure the capital until it reaches optimal net benefit of debt.