Equity Market Timing and Capital Structure: Evidence from Indonesia Stock Exchange

About Us

Ipmi Repository is an online archive service which is managed by IPMI Library - Learning Resource Center. Established for collecting, managing, saving, preserving and disseminating digital copies of intellectual output of IPMI International Business School such as academic journal, books, theses, Group Field Project, Community Involvement Project, Case Study, conference paper, and other types of research publication. The main objective of this repository is to provide long-term, public, open access and easily retrieve to the digital collection to support teaching-learning process.

"Knowledge without observation is nil"

Dhita, Sasha and Achsani, Noer Azam and Sembel, Roy and Purwanto, Sugeng (2018) Equity Market Timing and Capital Structure: Evidence from Indonesia Stock Exchange. Jurnal Manajemen Teknologi, 17 (1). pp. 1-9. ISSN 2089-7928

[img] Text
JMT Prof Roy 2018_Equity Market Timing and Capital Structure Evidence from Indonesia Stock Exchange.pdf - Published Version
Restricted to Registered users only

Download (8MB)

Abstract

It is commonly known that companies issue equity when the market values are high and repurchase when the market values are low. Using the yearly financial statements from 2001 until 2015, with the exclusion of 2008, for 136 non-financial companies listed on the Indonesia Stock Exchange (IDX), this study analyzed the existence of equity market timing with the consideration of equity and debt market variables using an econometric approach of panel data regression. This study adopted net equity issues as dependent variable. For the independent variables, this study adopted variables that reflect equity market condition: price-to-book value, market, profitability, and debt market variable that is interest rate. This study found that the variable affecting the net equity issues is profitability, while price-to-book value, market, and interest are not found to have a significant relationship with net equity issues. This shall imply that the companies issue external equity when the companies' profitability is good regardless of the valuation, and high interest rate. The findings of this study supported the existence of equity market timing shown by the significant relationship between variable profitability and net equity issues. Keywords: Capital structure, equity market timing, Indonesia, net equity issues, non-financial companies.

Item Type: Article
Subjects: H Social Sciences > H Social Sciences (General)
H Social Sciences > HF Commerce
H Social Sciences > HG Finance
Divisions: Research And Community Empowerment > Journals
Depositing User: Rizky Amalia
Date Deposited: 22 Jan 2020 05:39
Last Modified: 22 Dec 2021 04:38
URI: http://repository.ipmi.ac.id/id/eprint/538

Actions (login required)

View Item View Item