The Impact of Capital Structure and Managerial Ownership on Companys Financial Performance with Agency Cost as an Intervening Variable
Nikke Yusnita Mahardini (a*), Denny Putri Hapsari (a), Neneng Sri Suprihatin (a)
Universitas Serang Raya
Jl. Raya Cilegon Km. 05 (Taman Drangong) Serang, Banten 42162, Indonesia
*nikkeyusnita.m[at]gmail.com
Abstract
Company performance is an activity and results that can be achieved by a group in realizing the goals, objectives, vision, and mission contained in a companys strategic plan. However, in practice agency conflicts often occur. The agency conflict will lead to agency costs that will negatively impact the companys performance. This study aims to find empirical evidence about the impact of capital structure and managerial ownership on company financial performance with agency cost as an intervening variable. The research data used is the companys financial statements, and sample was taken using a purposive sampling method that meet the criteria with the number of observations as many as 12 companies listed on the Indonesia Stock Exchange. Path analysis is used to test and analyze the proposed hypothesis. The results of the study show that: 1) Capital structure influences the companys financial performance, 2) Managerial ownership does not affect the companys financial performance, 3) Direct capital structure through agency cost has a significant influence on the companys financial performance. 4) Indirectly managerial ownership through agency costs has a significant influence on the companys financial performance.
Keywords: Capital structure; Managerial ownership; Agency cost; and Company financial performance
Topic: Accounting and Financial Management