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ISSN : 1598-7248 (Print)
ISSN : 2234-6473 (Online)
Industrial Engineering & Management Systems Vol.19 No.3 pp.527-537
DOI : https://doi.org/10.7232/iems.2020.19.3.527

Investigating the Cash Holding Factors of Mining Industries in Indonesia Stock Exchange

Said Musnadi*, Ghazali Syamni, Faisal Nasir, Jumadil Saputra
Department of Management, Faculty of Economics and Business, Universitas Syiah Kuala, Banda Aceh, Indonesia
Department of Management, Faculty of Economics and Business, Universitas Malikussaleh, Aceh, Indonesia
Department of Management, Faculty of Economics and Business, Universitas Syiah Kuala, Banda Aceh, Indonesia
Department of Economics, Faculty of Business, Economics and Social Development, Universiti Malaysia Terengganu, 21030 Kuala Nerus, Terengganu, Malaysia
*Corresponding Author, E-mail: said.musnadi@feb.unsyiah.ac.id
May 6, 2020 June 22, 2020 June 30, 2020

ABSTRACT


The purpose of this study is to explore determinant factors that enable mining companies for cash holding in Indonesia. The panel data gathered from 40 financial statements of mining companies in Indonesia for the period 2013-2017 with a total of 200 observations. The panel data regression analysis used to examine and select the best model by utilizing the common effect model, fixed effect model and random effect model. The results of the study found that a cash holding company was determined by the return on assets, return on equity, net capital working, firm size, leverage and cash conversion cycle. All research variables mentioned above support trade-off theory except return on assets. The limitation of this study emerged since it made no separate discussion between the largest and the smallest cash holding companies. The results of this study have implications for management and companies to investigate other indicators enabling companies to conduct cash holding. Some suggested variables are macroeconomic factors, payment of dividends and investment opportunities and separation of large and small companies. The management of mining companies in managing cash holding was required to observe closely to the independent variables that match the trade-off or pecking order theory even the free cash flow theory.



초록


    1. INTRODUCTION

    The mining industry plays an important role in supporting the economy of a country, including Indonesia. Mining companies are companies that explore natural resources and prospectively (William and Fauzi, 2013). Sulaksono (2015) stated that every exploration of mining companies required expensive drilling costs, mapping and sampling. It was essential for mining companies to possess a large sum of cash due to high operational costs and in case of financial distress occurrence (Arfan et al., 2017, Ferreira and Vilela, 2004;Shatilova et al., 2018;Irani and Rezaei, 2018;Fava and Sampaio 2020). This condition pointed out the importance of cash in companies. Discussing the cash undoubtedly addresses the amount of cash the company has. Possessing a large amount of cash would allow companies to have more liquidity to operate throughout the year and even throughout the life of the company. It has conveyed by several previous researchers such as (Magerakis et al., 2015;Graef et al., 2018;Le et al., 2018;Horioka and Terada-Hagiwara, 2014).

    From a theoretical perspective, the company’s cash management explained by the trade-off theory and pecking order theory as well as the free cash flow theory. First, the trade-off theory that Myers (1977) revealed explained the existence of an optimal cash level in the company. Second, the pecking order theory proposed by Myers and Majluf (1984) described the inexistence of optimal cash in a company. The difference between these two theories gave birth to the free cash flow theory. The free cash flow theory was presented by Jensen (1986) that explained how cash served as a tool in controlling a company. Although Kling’s (2018) research stated that until now friction still emerges for management in cases of saving cash or investing in fixed assets, these three theories have given directions of decision making for companies or managers in managing cash.

    Meanwhile, from an empirical perspective it has been explained about companies holding cash. Several studies in developed countries have carried out by taking objects in various companies. Some studies analyzed company data in America (Kling et al., 2014;Kim et al., 2011;Im et al., 2017;Sánchez and Yurdagul, 2013). Several other studies investigated data in European countries as Hanson (2017), Graef et al. (2018), Baldi and Bodmer (2018). Research using British company data was conducted by Le et al. (2018), Magerakis et al. (2015)Guizani (2017) and in German Ali and Yousaf (2013) and Ahrends et al. (2018) and Rafinda (2018). Other research in the European region was carried out by Bigelli and Sánchez-Vidal (2012) in Italy.

    Meanwhile, research in Asia has also conducted to analyze companies in holding cash (Magerakis et al., 2015;Wu et al., 2017;Horioka and Terada-Hagiwara, 2014;Iles and Adegun, 2018). Research using Chinese company data was carried out by Ajid ur Rehman, Han and Qiu (2007) as well as in the BRIC country group Demir and Ersan (2017), Hall et al. (2014), Amess et al. (2015) who researched using several countries. Also, several studies using developing country research data have also conducted. Research focusing in Turkey included Kuzey and Uyar (2017), Uyar and Kuzey (2014), Abdioğlu (2016) in Pakistan by Sheikh and Qureshi (2017), Sheikh et al. (2018), Liubov et al. (2019), and Rizwan and Javed (2011), in India by Maheshwari and Rao (2017), Anand et al. (2018), in Brazil by Morais et al. (2019), Manoel et al. (2018), in Jordan by Tayem (2017) and in Egypt by Al-Najjar (2013). Recent research using Indonesian data were carried out by Amalia et al. (2018), Arfan et al. (2017), William and Fauzi (2013). Moreover, Akben-Selcuk and Altiok-Yilmaz (2017) analyzed many developing countries to be sampled in their research.

    The purpose of this study is to reexamine some of the factors that influence holding cash in mining companies registered with Indonesia Stock Exchange. Some variables used to test mining companies holding cash returned on assets, return on equity, net working capital, firm size, leverage and cash turnover. This research conducted in the 2013 period until 2017, the selection in that period was the change period of the administration of the former Indonesian President Susilo Bambang Yudhoyono 2013-2015 and 2016 to 2017. The period used as a dummy variable, where the value of 0 for the period 2015- 2017 and the value of 1 for the period 2013-2014. This study found that all the independent variables of return on assets, return on equity, net working capital, company size, leverage and cash conversion cycle affected the cash holding of mining companies in Indonesia. This study consists of five sections. The first section is the introduction, the second is of the literature, the third section discusses the method, while the fourth section explains the results and discussion, and the conclusion is mentioned in the fifth part.

    2. LITERATURE REVIEW

    2.1 Cash Holdings

    Cash serves a very crucial and urgent part for a company. It should be accessible in several urgent conditions such as making payments due and sudden bills and even used in short-term investment decisions. The urgency of cash would enable companies to maintain large amounts of cash in order to make it easier to make investment decisions. Many previous studies concluded some important advantages of cash holding for companies. A number of studies concluded basic cash holding profits would be beneficial for several reasons such as accidental occurrences and transactions, taxes and speculations (Chireka and Fakoya, 2017;Kim et al., 2011;Drobetz and Grüninger, 2007;Amess et al., 2015;Manoel et al., 2018) to avoid financial limitations (Rehman et al., 2016; Charles, Horioka, and Terada-Hagiwara, 2013); to maintain company liquidity (Rukh et al., 2017), to gain investment opportunities (Farinha and Prego, 2014), to ensure the organization of the company to run well (Le et al., 2018) and to be prepared for uncertainty in the future (Kling, 2018). Thus it can be concluded that cash holding for companies provides distinct benefits for the company by the circumstances of the company.

    2.2 Profitability and Cash Holding

    To produce a great profitability level was certainly a goal of every company. The amount of profitability would provide an opportunity for companies to exploit company revenues as retained earnings until it transformed into cash. In other words, the company has its own funds in financing future investment opportunities (Ferreira and Vilela, 2004;Liubov et al., 2019;Manoel et al., 2018;D’Mello et al., 2008;Al-Najjar and Clark, 2017;Arfan et al., 2017). All their research was in support of pecking order theory which explained that large companies were required to preserve and maintain greater cash funds. It in turn would facilitate them to be involved in various investments. Besides, large cash companies would gain better trust in obtaining loans from outside parties (Hall et al., 2014). On the other hand, several studies by Thu and Khuong (2018), Kim et al. (1998), Lee and Song (2007) claimed that profitability has a negative effect on cash holding. According to their research, companies with high profitability applied policies to hold cash and to save it as retained earnings. The existence of cash from retained earnings is used by the company to repay previous debts that have matured. It eventually decreases the value of the retained cash balance.

    2.3 Net Working Capital and Cash Holding

    Networking capital is mentioned as a good cash substitute (Bigelli and Sánchez-Vidal, 2012). Several studies by Opler et al. (1999), D’Mello et al. (2008), Maheshwari and Rao (2017), Gill and Shah (2012), Magerakis et al. (2015), Tayem (2017), Arfan et al. (2017) proposed that networking capital has negatively correlated with cash holding. Their findings helped to support the tradeoff theory. Also, it explained the company's tendency to utilize less cash when they possess networking capital due to companies’ activities to manage and to maintain continuity of their business activities and to gain results eventually. Other studies by Guizani (2017), Gill and Shah (2012), and William and Fauzi (2013) claimed that networking capital correlated positively with cash holding. Their findings explained that companies used large amounts of cash to invest in current assets that would lead to better sales returns. However, this policy would reduce the risk of cash holding.

    2.4 Company Size and Cash Holding

    Opler et al. (1999) compared trade-off theory with transaction theory which required companies to have optimal cash. Companies with less optimal cash would encourage low-profit levels even towards financial distress (Le et al., 2018). In the trade-off theory, it explained that company size was negatively correlated with cash holding, especially for small companies, so companies would operate using funds from outside sources (Ferreira and Vilela, 2004;Bigelli and Sánchez-Vidal, 2012;Ehikioya and Qin, 2007;Drobetz and Grüninger, 2007;Magerakis et al., 2015;Rukh et al., 2017;Tayem, 2017).

    On the other hand, the Pecking Order Theory proposed by Myers and Majluf (1984) revealed that there was no optimal cash in the company. Some recent studies were consistent with Myers and Majluf (1984) as Ferreira and Vilela (2004), Le et al. (2018), Guizani (2017), Liubov et al. (2019), Morais et al. (2019), Gill and Shah (2012) who all claimed that implementation of pecking order theory required companies to use low costs. Therefore, companies tend to use internal funds from retained earnings. Opler et al. (1999) mentioned the existence of optimal cash for the company enabled the company to maintain a higher level in order to invest when needed. In other words, the size of the company is positively correlated with cash holding.

    Regarding company size, a similar principle to the free cash flow theory was found. Le et al. (2018) stated that managers who manage companies with large cash were more powerful which brought discretion in making decisions and placed no need for outside party funds. The free cash flow theory was established on the opinion that companies with larger cash would provide stronger control to managers. Moreover, Le et al. (2018), Mardani and Fallah (2018) claimed it was unnecessary for managers in companies with sufficient cash and the ability to finance new projects to use external funds. Thus, the companies would not be required to share the value of the investment project with other parties.

    2.5 Leverage and Cash Holding

    Concerning cash holding, leverage opinion was still pro and contra since that there was research in favor of pecking orders theory but there was research supporting trade-off theory. The support for the trade-off theory was conveyed by Ferreira and Vilela (2004), Liubov et al. (2019), Uyar and Kuzey (2014), Morais et al. (2019), Arfan et al. (2017), Magerakis et al. (2015), Thu and Khuong (2018), Tayem (2017). All the results of their research concluded that leverage was negatively related to holding cash. It is due to additional costs for companies with high debt levels compared to companies with low debt. Several studies in trade-off theory discovered that leverage was positively correlated with cash holding (Le et al., 2018;Ozkan and Ozkan, 2004;Ehikioya and Qin, 2007;Guizani, 2017;Gill and Shah, 2012;Amalia et al., 2018). All the results of their research required companies to possess large amounts of cash in the form of retained earnings. The company is expected to reduce leverage to decrease risk.

    On the other hand, Ferreira and Vilela (2004) outlined reasons for companies that collected cash as retained earnings, then issued a policy of indebtedness in their investments. It would then decrease cash holding due to high debt. This condition, theoretically, in which the free cash flow of companies with high debt levels by holding cash as retained earnings was considered as unfit. Le et al. (2018) mentioned that this condition of the holding cash value decrease since it would decrease the company's market value. This is a reason for investors to monitor the company.

    2.6 Cash Turnover and Cash Holding

    Each industry bears its characteristics, but it relates to cash trying to produce large quantities (Ahrends et al. (2018). Im et al. (2017) and Wu et al. (2017) explain that companies provide large cash due to uncertainty in the future such as financial limitations and agency conflicts. Several previous studies, such as by Guizani (2017), Horioka and Terada-Hagiwara (2014), Uyar and Kuzey (2014), Chireka and Fakoya (2017), Gill and Shah (2012), William and Fauzi (2013) explained a positive relationship between cash turnover and cash holding. In other words, the company accelerated cash collection and attempted to withhold external borrowing aimed at investment opportunities. Nevertheless, Bigelli and Sánchez- Vidal (2012) claimed that cash holding was very much determined by the duration and shortness of cash conversions. The longer the cash was converted, the greater the amount of cash was required. Thus, rapid cash turnover would enable a smaller amount of cash holding.

    3. METHODOLOGY

    The data used in this study was panel data in 40 of the 45 mining companies listed on Indonesia Stock Exchange (IDX) in the period 2013-2017. Five other companies were not included in the study sample due to incomplete data. Thus the number of observations in this study was 200 observations. Some research variables used in this study as seen in Table 1 below:

    Furthermore, in exploring the factors that influence mining companies in IDX formulation was based on variable descriptions as written in Table 1 above. Thus, the model of this study was a panel regression model with an empirical formula written as follows:

    CH it β 0 + β 1 ROA it + β 2 ROE it + β 3 NWC it + β 4 FS it + β 5 LEV it + β 6 CCC it + ... + β 7 Dummy Regime it +e it
    (1)

    Because this study used panel regression, it was conducted with a model approach to the regression specification of common effect models, fixed effect models and random effect models. The selection of the best model specifications in this study was carried out by applying the Chow and Hausman tests. The Chow test was conducted to test the selection of the best model between the common effect models and the fixed effect model. When the chi-square value is not significant at five percent, the best model is the common effect model and the Hausman test is unnecessary. On the contrary, if the chi-square value was significant below five percent, the best model was the fixed effect model. If the Hausman test would be needed, it was carried out to select the fixed effect model with a random effect model. If the chi-square value was significant, the best model was the random effect model, whereas if the value was significant, the best model in this study would be the random effect model.

    4. RESULTS AND DISCUSSION

    The results of the statistical descriptive data consisting of the mean, standard deviation, maximum, and minimum and the number of observations as seen in Table 2. The results of the statistical description showed that the average value of mining companies holding cash was 0.1252 with a minimum value of 0.0001 and a maximum value of 0.5797. It explained that there was a real level of diversity in mining companies holding cash.

    Table 1 shows that the result also applies to other independent variables that were sampled and observed in this study. For example, the average value of return on assets was 0.1240 with a minimum value of -0.7213 and a maximum value of 0.4233. In general, the data used in this study has shown no more significant difference. It can be seen from the average value of all the dependent and independent variables still higher than the standard deviation value. After analyzing the description of the data, Table 3 shows the correlation matrix that explained the existence of multicollinearity among variables.

    Based on the matrix correlation table above, it can be explained that an independent variable, namely returns on assets, return on equity, net capital working, firm size, leverage and the cash conversion cycle were uncorrelated. It is shown in the correlation value that did not reach 0.8. Thus, the panel regression model used in this study was far from the symptoms of multicollinearity. Besides, Table 3 showed a correlation between the independent and dependent variables. Return on assets, return on equity, networking capital has a positive correlation with cash holding. Whereas firm size, leverage and cash conversion cycles are the opposite correlates. Although the statistical value was still at a weak significant level of 10 percent except for return on equity. It indicates that the use of the cash holding policy on the company correlates with the six independent variables used. Table 4 reports the results of the panel regression analysis.

    In Table 4 above also explained the Chow test and Hausman test as a prerequisite for choosing the best model from the 3 models that have been regressed. Based on the two tests it turned out that the best model in this study was a random effect model. The choice of random effect model was because the Chow test results showed a value of 7 and a significant 1 percent therefore the Hausman test is carried out. However, the Hausman test results showed that the value of the cross-section was 7 and not significant. Based on Table 4 above as a result of panel data regression by using the common effect model, the fixed-effect model and random effect model turned out to show that the results were consistent. This means that using all three significant data regression models are all significant. Thus the research model is:

    CH it 0. 493336+0 .24581ROA it 0. 000012 ROE it 0.0000052 NWC it 0.108279 FS it ... 0. 0116901LEV it - 0.011170 CCC it 0..014795 Dummy Regime it
    (2)

    The above equation means that the constant value 0.493336, This shows if the return on assets, return on equity, net working capital, firm size, leverage and cash conversion cycle and dummy regime were constant, then mining companies need cash to save 0.493336 points. The coefficient of return on assets is positive (0.24581) for cash holding. This finding explained that if the return on assets increased by 1 point, cash holding would rise by 0.24581 points. The return on equity coefficient was negative (0.000012) for the cash holding. This finding showed that if the return on equity increased by 1 point, the holding cash would decrease by 0.000012 points. The Net Working Capital coefficient was negative (0.0000052) for cash holding. This finding showed that if net working capital increased by 1 point, cash holding decreased by 0.0000052 points. The coefficient of firm size was negative (0.108279) against Cash Holding. This finding showed that if the firm size increased by 1 point, the cash holding would fall by 0.108279 points. The coefficient of firm size was negative (0.108279) against Cash Holding. This finding indicated that if the firm size increased by 1 point, the cash holding would decline by 0.108279 points. The leverage coefficient was negative (0.0116901) against the cash holding. This finding showed that if leverage rose 1 point, the cash holding decreased by 0.0116901 percent. The Cash Conversion Cycle coefficient was negative (0.011170) against Cash Holding. This finding showed that if the Cash Conversion Cycle rose 1 point, the cash holding fell by 0.011170 points. The dummy coefficient is negative (3.481) for the cash holding. This finding showed that there were differences in the period of cash management during the 2013-2014 government period and the 2015-2017 government period.

    Based on Table 4, it also demonstrated about R Square (R2) of all independent variables; return on assets, return on equity, net working capital, firm size, leverage and 15% cash covers cycle. These findings indicated that return on assets, return on equity, net working capital, firm size, leverage and cash conversion cycle were able to explain Cash Holding by 15%. It revealed that the rest 85% was explained by other variables not analyzed in this study. Also, F was 14,968 with a significance value of 1 percent, indicating that return on assets, return on equity, net working capital, firm size, leverage and cash conversion cycle and dummy regime simultaneously influenced the cash holding.

    The result of the examination of the random effect was discussed in Table 5 below. Principally, the results of the study discovered that all independent variables affect the dependent variable. It was reflected in the significant probability value of 1% and 5% or all tstatistic values higher than the t-table value of 1.9723. Return on assets placed a significant positive effect, while return on equity, firm size, leverage and cash covers cycle assigned a significant negative effect on cash holding at the level of 1 percent. However, networking capital affected cash holding negatively significant at the 5 percent level. Also, the period dummy variable placed a significant negative effect on the cash holding at the 5 percent level.

    4.1 Profitability for Cash Holding

    In this study, return on assets support the pecking order theory and is in line with the findings of Ferreira and Vilela (2004), Liubov et al. (2019), Manoel et al. (2018), D’Mello et al. (2008), Al-Najjar and Clark (2017) except Arfan et al. (2017) even though the value is positive but not significant. This study’s findings explain that holding cash is influenced by return on assets which indicates that the return on assets in the company is used as an investment in company assets. It would facilitate companies to safeguard cash and make investment opportunities easier and obtain trust loans from outside parties (Hall et al., 2014).

    Meanwhile, the return on equity in this study supports the trade-off theory. The results of the study are in line with Thu and Khuong (2018), Kim et al. (1998), Lee and Song (2007) where their findings explain the return on assets posits a negative effect on cash holding. A negative relationship occurs since the company tends to use the entire profit to reimburse the existing debts. Besides, companies are more likely to distribute equity-derived profit to shareholders in the form of dividends to avoid affecting the company’s cash holdings.

    4.2 Effects of Net Working Capital on Cash Holding

    Networking capital places a negative and significant effect on cash holding and this supports a trade-off theory. This finding is by Opler et al. (1999), D’Mello et al. (2008);Maheshwari and Rao (2017), Gill and Shah (2012), Magerakis et al. (2015), Tayem (2017) and Arfan et al. (2017). These findings indicate that the company is more dynamic in managing the sustainability of its business ventures and anticipating for profits to be received at the end of its accounting period. The results of this study are contrary to Guizani (2017), Gill and Shah (2012), and William and Fauzi (2013) which explain positive relationships with cash holding. Also, the companies were claimed to be utilizing and investing cash in current assets in order to reduce cash holding.

    4.3 Effect of Company Size on Cash Holding

    The size of the company supports a trade-off theory which reveals a negative relationship with cash holding. Bigelli and Sánchez-Vidal (2012), Ehikioya and Qin (2007), Drobetz and Grüninger (2007), Magerakis et al. (2015), Rukh et al. (2017), and Tayem (2017) explained companies that conducting cash holding are more vulnerable to financial distress and more likely to gain less profit. This finding is different from what Le et al. (2018), Guizani (2017), Liubov et al. (2019), Morais et al. (2019), Gill and Shah (2012) who support pecking order theory and explain that company size is positively correlated with cash holding where companies tend to use internal funds in investing. The results of this study also do not support free cash flow theory Le et al. (2018) which explains companies prefer to manage large cash holding which is used as a tool to control company managers

    4.4 Effect of Leverage on Cash Holding

    Statistical test results generated a negative symbol on the level of leverage significance with the cash holding. This finding supported the trade-off theory as in several other studies presented by Ferreira and Vilela (2004), Liubov et al. (2019), Uyar and Kuzey (2014), Morais et al. (2019), Arfan et al. (2017), Magerakis et al. (2015), Thu and Khuong (2018), Tayem (2017). They concluded that companies with a high level of debt have additional costs compared to companies with slightly low debt. The high additional cost was due to the company’s obligation to pay the debt which resulted in a decrease in cash. This study was not by Le et al. (2018) and Ozkan and Ozkan (2004), Ehikioya and Qin (2007), Guizani (2017), Gill and Shah (2012), Amalia et al. (2018) who suggested to reduce debt and prefer higher retained earnings.

    4.5 Effect of the Cash Conversion Cycle on Cash Holding

    The results of the cash conversion cycle research with cash holding are different than expected. The findings of this study explained that the relationship between the cash conversion cycle brought a negative correlation with cash holding. In other words, the cash conversion cycle variable was consistent with the trade-off theory. The results of this study by Bigelli and Sánchez-Vidal (2012) claimed that if companies managed cash conversion too long for a lengthy period, it would cause the cash holding to erode. The results of this study were contrast with Guizani (2017), Horioka and Terada-Hagiwara (2014), Uyar and Kuzey (2014), Chireka and Fakoya (2017), Gill and Shah (2012), William and Fauzi (2013) who stated that the cash conversion cycle had a positive effect on cash holding. They found that companies capable of accelerating cash inflows would prevent them from borrowing outside funds in investing.

    4.6 Time Period and Cash Holding

    In this study, the time period was included as dummy variables. The results of the study explained that there were differences in the company managing cash holding. This finding explained that companies were in different circumstances from year to year. These differences were both related to the company’s internal conditions such as company policies and external companies such as macroeconomics.

    5. CONCLUSION

    The main objective of this study is to explore the factors that affect the cash holding of mining companies in the Indonesia Stock Exchange. Reviews on the results of several studies in both developed and developing countries including Indonesia found that cash holding in companies was still inconsistent. Inconsistency is determined based on the trade-off theory, pecking order theory and free cash flow theory. This research is conducted in the data period of mining companies in the period 2013-2017 with a total of 200 observations. Several determinants of cash holding used included return on assets, return on equity, net capital working, firm size, leverage and cash conversion cycle. Furthermore, this study has several weaknesses that the ability to explain or the coefficient of determination is still very low. It means that many other variables need to be used in future research. Some suggested variables include macroeconomic variables, dividend payments and investment opportunities and separate large and small companies.

    Several conclusions can be drawn based on the results of empirical research that examines the factors that influence the cash holding. All independent variables used include return on assets, return on equity, net capital working, firm size, leverage and the cash conversion cycle determine the cash holding both simultaneously and partially. Five of the six independent variables return on equity, net capital working, firm size, leverage and cash conversion cycle all have a negative effect on cash holding. It indicates that mining companies in the cash holding policy are more in line with the trade-off theory than the pecking order theory. An exception of the return on assets has a positive effect on cash holding in mining companies. Also, the results of this study support the trade-off theory. In other words, mining companies in taking aggressive policies are a bit of a drain on cash. Practically, the results of the study have implications for investors, management and creditor to provide a clue in managing the company’s cash in making investment policies — cash holding in companies determined by the characteristics of companies that are different from each other.

    Figure

    Table

    Research variable description

    Stastical descriptive analysis (N=200)

    Correlation matrix

    Note: *, **, *** significant at level 1%, 5% dan 10%.

    The result of panel data regression

    Note: *, **, *** significant at level 1%, 5% dan 10%. Common Effect Model (CEM), Fixed Effect Model (FEM), Random Effect Model (REM).

    The summary of results of panel data regression analysis

    Note: POT is Pecking Order Theory, TOT is Trade-Off Theory, FCF is free cash flow.

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