THE INFLUENCE OF AGENCY COSTS AND INVESTMENT TOWARDS DIVIDEND AND THEIR IMPLICATIONS ON THE LEVERAGE IN THE CONTEXT OF CAPITAL STRUCTURE CHANGES A STUDY ON DOMESTIC AND FOREIGN CAPITAL INVESTORS IN INDONESIA
International Journal of Economics, Commerce and Management United Kingdom
This study was aimed at analyzing the effect of agency costs and investment to leverage the dividend and its implications in the context of changes in the company's capital structure on foreign direct investment (FDI) and domestic investment companies (DCI) in Indonesia before the crisis and after the crisis of 1998, based on the perspective capital structure theory, the theory of information asymmetry and agency theory by building a model of structural theory and dynamic mix of integrated
... of integrated capital structure proposed. The companies distributing dividends during the period of 1996-2012 years consistently were the unit of analysis. Based on data it showed that there are 22 foreign investment company (PMA) and 24 domestic investment © Yofi, Ina, Sutisna & Aldrin Licensed under Creative Common Page 590 companies (DCI). The method used in this research was explanatory research. Secondary data was analyzed as the data panel, cross-sectional, and time series by using regression panel. Eviews 7 output suggested that there are differences in aspects of agency costs and investments in domestic and foreign companies in the period pre and post-crisis. This is also true for ownership structure, utilization of assets ratio, free cash flow, profitability, growth, size and risk strengthened by dividend which have a significant impact on the Company's leverage (FDI) before and after the crisis. But those are in the contrary to what happened in the domestic investment company because all that components do not have significant influence upon the leverage before the crisis and only give impact after the crisis period.