IMPACT OF CAPITAL STRUCTURE AND FIRM FINANCIAL PERFORMANCE ON FIRM VALUE: EVIDENCE OF AGRIBUSINESS FIRMS IN INDONESIA STOCK EXCHANGE

• Main Authors: Siregar R.Y.D., Anggraeni L., Pranowo K.
• Format: Article
• Language: English
• Published: Russian Journal of Agricultural and Socio-Economic Sciences 2019-01-01
• Series: Russian Journal of Agricultural and Socio-Economic Sciences
• Subjects: Agribusiness; capital structure; firm financial performance; firm value; panel regression
• Online Access: https://rjoas.com/issue-2019-01/article_54.pdf

Agribusiness is one of the driving sectors to national economy. This sector has high risk lead to uncertainty to capital and firms’ earnings. The aim of this study is to analyze the impact of capital structure and firm financial performance to agribusiness firm value. Panel regression is used to analyze 16 sample of agribusiness companies from 2012 to 2016. The results of this study showed that capital structure (DER) and firm financial performance (ROA & ROE) have a positive and significant effect to agribusiness firm value. Firms must to restructure their debts to avoid the risk of bankruptcy and improve its business performance. Investors must be considering not to invest in firms with risk of bankruptcy. The government must to establish the rules more firmly and take an action against the firms that violate the rules.