The Effect of Institutional Ownership, Managerial Ownership, and Firm Age on Capital Structure of Consumer Goods Companies listed on Indonesia Stock Exchange

ABSTRACT: This study aims to determine the effect of institutional ownership, managerial ownership, and firm age on capital structure measured by the debt to equity ratio (DER) of consumer goods companies listed on Indonesia Stock Exchange (IDX) period 2012-2018. The sampling technique used is the census sampling method with total sample 36 companies. Data analysis method is done by multiple linear regression analysis. The results showed that institutional ownership and managerial ownership had a significant negative effect on capital structure measured with debt to equity ratio (DER). The firm age has a significant positive effect on capital structure as measured by the debt to equity ratio (DER). This shows that the higher the institutional ownership and managerial ownership, the lower the debt to the company. Opposite with the firm age that is going higher, the debt of the company will also be higher.
KEYWORDS: capital structure, institutional ownership, managerial ownership, firm age