Erna Setijani, Pudjo Sugito, Chodidjah Chodidjah


This study intends to analyze the role of entrepreneurship as a moderating variable on the effects of capital
structure decisions on financial performance. Population, all the small and medium industries (SMEs) in the
town of Probolinggo, with a sample set of 100 units of SMEs and data collection using purposive random
sampling technique. Data were analyzed using factor analysis in the SEM is used to confirm the most dominant
factors in a group of variables and regression weight on the SEM used for confirmatory examine how
much the relationship between variables. Furthermore, SEM modeling needs to step (a) the development of a
theoretical model, (b) the development path diagram (c) selecting an input matrix and estimation of covariance
or correlation models, (d) the possibility of the emergence of problem identification, (e) evaluation criteria of
goodness-of-fit and (f) the interpretation and modification of the model. The results showed, capital structure
decisions have a significant effect on financial performance. Capital structure decisions have a significant
effect on the financial performance through entrepreneurship moderating variable. Entrepreneurship significant
effect on the financial performance.


capital structure, entrepreneurship, financial performance


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