Family Firm and Capital Expenditure

Ardiansyah Rasyid, Viter Pratama
2021 Proceedings of the Ninth International Conference on Entrepreneurship and Business Management (ICEBM 2020)   unpublished
This paper aimed to investigate that the family ownership affects capital expenditure. This phenomenon can be indicated by firm financing, which is related to the sales and cash flow factors. Family ownership aims to defend the capital aggressiveness as reflected by the capital expenditure activity. Data was obtained from public companies listed in the Indonesia Stock Exchange (IDX) in the period of 2014-2016. Data analysis used multiple regression model. The result of this research is that
more » ... flow and family ownership do not influence capital expenditure positively. But for the other variable; sales positively influence capital expenditure. From this result, this paper does not indicate that family ownership finances the capital expenditure more aggressively. The data cannot approve that family ownership can control capital expenditure and also the cash flow variable cannot prove the pecking-order theory. However, sales variable can influence capital expenditure as a base of financing. This phenomenon can support the pecking-order theory. This means that sales variable can finance the capital expenditure, which finally can reduce the agency cost.
doi:10.2991/aebmr.k.210507.003 fatcat:b3jhhhooxjab5eu2elhkpljf74