| By: |
Hidenobu Okuda;
Yasushi Take |
| Abstract: |
This study investigates the factors determining the capital structure of
Indonesian listed companies before and after the implementation of economic
reform policies subsequent to the 1997-1998 Asian financial crisis. The
estimation analysis of the panel data for the period 1994-1997 and 2000-2006
reveals several factors that determined substantive change in the financing
activities of these listed companies. The capital structure of Indonesian
companies had not been explained sufficiently by the standardized theory of
corporate financing, which had not considered the effects of the specific
social and political elements as well as business conglomerates, before the
Asian financial crisis. However, the capital structure of Indonesian companies
became fitted more to the corporate financing theory, after the influence of
social and political factors of corporate attributes weakened substantially
following the post-crisis reform policies. This significant change is
considered to result from institutional change caused by the financial and
corporate reforms in the post-financial crisis era. |
| Keywords: |
Corporate Finance, Capital Structure, Ethnic network, Indonesia |
| JEL: |
G32 G34 G38 |
| Date: |
2009–12 |
| URL: |
http://d.repec.org/n?u=RePEc:hst:ghsdps:gd09-108&r=cfn |