Microeconomics and raw material price on capital structure adjustment through dynamic target in Indonesian textile industries
This study aims to examine the effects of company-specific macroeconomic fluctuation in raw materials prices on the speed of adjustment through dynamic targeting capital structure on textile companies listed on the Indonesia Stock Exchange during 2012 and the second quarter of 2020. Using panel data...
| Main Authors: | , , , |
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| Format: | Article |
| Language: | English |
| Published: |
Growing Science
2021-01-01
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| Series: | Accounting |
| Online Access: | http://www.growingscience.com/ac/Vol7/ac_2020_136.pdf |
| _version_ | 1818208088675581952 |
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| author | Dasman, Sunita Febrian, Erie Nidar, Sulaeman Herwany, Aldrin |
| author_facet | Dasman, Sunita Febrian, Erie Nidar, Sulaeman Herwany, Aldrin |
| author_sort | Dasman, Sunita |
| collection | DOAJ |
| description | This study aims to examine the effects of company-specific macroeconomic fluctuation in raw materials prices on the speed of adjustment through dynamic targeting capital structure on textile companies listed on the Indonesia Stock Exchange during 2012 and the second quarter of 2020. Using panel data regression of the fixed-effect method, we discovered that the speed of adjustment varies in each industry and period. Textile companies listed on the Indonesia Stock Exchange adjust their capital structure through a dynamic target of 53.3% per year. It takes 1 year and 10 months to close the target capital structure. The factors that determine the target capital structure include company size, tangibility, liquidity and growth opportunity, asset utilization, as well as retained earnings. On the other side, factors that contribute to the speed of adjustment include company size, growth opportunity, earnings volatility, asset utilization, retained earnings, distance to the target, and economic growth. Other factors that also affect the speed of adjustment include fluctuations in the prices of cotton and crude oil. The result of this study is expected to provide an optimal capital structure formulation to the textile industries in Indonesia to finance companies’ operational activities and growth opportunities effectively. This study also provides an overview of how textile companies make capital structure adjustment, as there are changes in company-specific factors, macroeconomic conditions, and fluctuation in raw material prices. |
| first_indexed | 2024-12-12T04:39:16Z |
| format | Article |
| id | doaj.art-0a4470a4d4c94a6490340f62eaf7069e |
| institution | Directory Open Access Journal |
| issn | 2369-7393 2369-7407 |
| language | English |
| last_indexed | 2024-12-12T04:39:16Z |
| publishDate | 2021-01-01 |
| publisher | Growing Science |
| record_format | Article |
| series | Accounting |
| spelling | doaj.art-0a4470a4d4c94a6490340f62eaf7069e2022-12-22T00:37:52ZengGrowing ScienceAccounting2369-73932369-74072021-01-0123123810.5267/j.ac.2020.9.013Microeconomics and raw material price on capital structure adjustment through dynamic target in Indonesian textile industriesDasman, SunitaFebrian, ErieNidar, SulaemanHerwany, AldrinThis study aims to examine the effects of company-specific macroeconomic fluctuation in raw materials prices on the speed of adjustment through dynamic targeting capital structure on textile companies listed on the Indonesia Stock Exchange during 2012 and the second quarter of 2020. Using panel data regression of the fixed-effect method, we discovered that the speed of adjustment varies in each industry and period. Textile companies listed on the Indonesia Stock Exchange adjust their capital structure through a dynamic target of 53.3% per year. It takes 1 year and 10 months to close the target capital structure. The factors that determine the target capital structure include company size, tangibility, liquidity and growth opportunity, asset utilization, as well as retained earnings. On the other side, factors that contribute to the speed of adjustment include company size, growth opportunity, earnings volatility, asset utilization, retained earnings, distance to the target, and economic growth. Other factors that also affect the speed of adjustment include fluctuations in the prices of cotton and crude oil. The result of this study is expected to provide an optimal capital structure formulation to the textile industries in Indonesia to finance companies’ operational activities and growth opportunities effectively. This study also provides an overview of how textile companies make capital structure adjustment, as there are changes in company-specific factors, macroeconomic conditions, and fluctuation in raw material prices.http://www.growingscience.com/ac/Vol7/ac_2020_136.pdf |
| spellingShingle | Dasman, Sunita Febrian, Erie Nidar, Sulaeman Herwany, Aldrin Microeconomics and raw material price on capital structure adjustment through dynamic target in Indonesian textile industries Accounting |
| title | Microeconomics and raw material price on capital structure adjustment through dynamic target in Indonesian textile industries |
| title_full | Microeconomics and raw material price on capital structure adjustment through dynamic target in Indonesian textile industries |
| title_fullStr | Microeconomics and raw material price on capital structure adjustment through dynamic target in Indonesian textile industries |
| title_full_unstemmed | Microeconomics and raw material price on capital structure adjustment through dynamic target in Indonesian textile industries |
| title_short | Microeconomics and raw material price on capital structure adjustment through dynamic target in Indonesian textile industries |
| title_sort | microeconomics and raw material price on capital structure adjustment through dynamic target in indonesian textile industries |
| url | http://www.growingscience.com/ac/Vol7/ac_2020_136.pdf |
| work_keys_str_mv | AT dasmansunita microeconomicsandrawmaterialpriceoncapitalstructureadjustmentthroughdynamictargetinindonesiantextileindustries AT febrianerie microeconomicsandrawmaterialpriceoncapitalstructureadjustmentthroughdynamictargetinindonesiantextileindustries AT nidarsulaeman microeconomicsandrawmaterialpriceoncapitalstructureadjustmentthroughdynamictargetinindonesiantextileindustries AT herwanyaldrin microeconomicsandrawmaterialpriceoncapitalstructureadjustmentthroughdynamictargetinindonesiantextileindustries |