| Summary: | The purpose of this study was to examine the effect of several variables: the
internal cash flow, insider ownership, and investment opportunity to the capital
expenditure with a control variable sales. This research refers to research Griner and
Gordon (1995) and Hamidi (2003) which will test the hypothesis or the managerial
pecking order in Indonesia.
The sample used in this study were all manufacturing companies listed in
Indonesia Stock Exchange using the study period between 2004-2007. The data was
collected by pooling so acquired 143 companies in observation., Method used in the
selection of the sample in this study was purposive sampling, in order to obtain 40
manufacturing companies that will be studied.
The results showed that all three dependent variables tested (internal cash flow,
insider ownership, and investment opportunity), none of which showed Significance with
capital expenditures. The only variable that showed Significance is the sales as a control
variable.
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