Coal Prices and Foreign Ownership on the Capital Structure of Indonesian Coal Companies

Hanum Amalia Budhi Pratiwi, Noer Azam Achsani, Toni Irawan

Abstract


This paper investigated the effect of coal prices and foreign ownership on the capital structure of coal companies in the Indonesian stock exchange. This study used debt to equity ratio (DER) to proxy capital structure and control variables, i.e., size, liquidity, and profitability. This study employed the statistic descriptive analysis and regression analysis of panel data and covered quarter data of 23 coal companies listed in the Indonesian stock exchange in a 3-year time horizon (2018-2020). This study concludes that ten out of 23 coal companies have more than 100% DER. Based on the sources of liabilities, debt originating from third parties is the primary source of debt for coal companies listed on the IDX in 2018-2020. The next order of sources of debt in a row is bank loans, debts from related parties, lease payables, bonds, and dividends. The result showed that ten out of 23 companies have a more than 100% capital structure value. The panel data regression analysis showed that capital structure significantly impacts coal prices, foreign ownership, size, liquidity, and profitability. As one of the main coal exporters, Indonesia has a good bargaining position in the international market. An investor can use the movement of coal prices as one of the criteria for deciding to invest in this industry.

Full Text:

PDF

References


Abu-Rayash, A., & Dincer, I. (2020). Analysis of the electricity demand trends amidst the covid-19 coronavirus pandemic. Energy Research & Social Science, doi:10.1016/j.spc.2020.10.016

Al Ani, M.K., & AL Amri, M.S., (2015). The determinants of capital structure: An empirical study of Omani listed industrial companies. Business: Theory and Practice, 16(2), 159-167.

Arini, F., & Harlendro. (2013). Pengaruh likuiditas, ukuran perusahaan, struktur aktiva, profitabilitas, dan pertumbuhan penjualan terhadap struktur modal (Studi pada perusahaan pertambangan yang terdaftar di bursa efek Indonesia). JIMFEB, 2(2), 1-14.

Balios, D., Daskalakis, N., Erlotis, N., & Vasiliou, D. (2015). SMEs capital structure determinants during severe economics crisis: The case of Greece. Cogent Economics and Finance, 4, 1-11. doi:10.1080/23322039.2016.1145535

Bolak, M., Diyarbakirlioglu, E., & Süer, O. (2013). Foreign ownership and financial information. EuroMed Journal of Business, 8(2), 154-171.

Chen, L.J., & Chen, S.Y. (2011). How the pecking-order theory explains capital structure. Journal of International Management Studies, 6(3), 92-100.

Dewiningrat, A.I., & Mustanda. (2018). Pengaruh likuiditas, profitabilitas, pertumbuhan penjualan, dan struktur aset terhadap struktur modal. E-Jurnal Manajemen Unud, 7(7), 3471-3501.

Do, T.K., Lai, T.N., & Tran, T.T.C. (2019). Foreign ownership and capital structure dynamics. Finance research letters, doi:10.1016/j.frl.2019.101337

El-Diftar, D. (2020). Firm-level determinants of capital structure in the MENA region. Journal of Research in Emerging Market, 2(3), 1-13.

Fadhilah, A. 2012. Pengaruh struktur modal terhadap kinerja keuangan perusahaan: studi kasus pada perusahaan sektor pertambangan yang tercatat di bursa efek Indonesia 2005-2011. Kajian Ekonomi dan Keuangan, 16(1), 1-15.

Ferdiansya, M.S., & Isnurhadi. (2013). Faktor-faktor yang mempengaruhi struktur modal pada perusahaan pertambangan yang terdafatr di bursa efek Indonesia. Jurnal Manajemen & Bisnis Sriwijaya, 11(2), 133-148.

Fuadiantoni, R., Suratna, & Mulyanto, I.H. (2019). Analisis faktor-faktor yang mempengaruhi struktur modal pada perusahaan batubara. JIABI, 3(2), 109-132.

Gurunlu, M., & Gursoy, G. (2010). The influence of foreign ownership on capital structure of non-financial firms: Evidence from Istanbul stock exchange. IUP Journal of Corporate Governance, 9(4), 21-29.

Horne, J.C.V., & Wachowicz, Jr. J.M. (2012). Prinsip-prinsip Manajemen Keuangan Edisi 13, Buku 1. Jakarta, ID: Salemba Empat.

Jibran, S., Wajid, S.A., Waheed, I., & Muhammad, T.M. (2012). Pecking at pecking order theory: Evidence from Pakistan's non-financial sector. Journal of Competitiveness, 4(4), 86-95.

Kementerian Energi Sumber Daya dan Mineral. (2020). Harga Batubara Acuan. Retrieved from Kementerian Energi Sumber Daya dan Mineral website: www.esdm.go.id

Khodavandloo, M., Zakaria, Z., & Nassir, A.M. (2017). Capital structure and firm performance during global financial crisis. International Journal of Economics and Financial Issue, 7(4), 498-506.

Kustodian Sentral Efek Indonesia. (2021). Kepemilikan Efek. Retrieved from Kustodian Sentral Efek Indonesia website: www.ksei.co.id

Lipson, M.L., & Mortal, S. (2009). Liquidity and capital structure. Journal of Financial Markets, 12(4), 611-644.

M'ng, J.C.P, Rahman, M., & Sannacy, S. (2017). The determinants of capital structure: Evidence from public listed companies in Malaysia, Singapore, and Thailand. Cogent Economics and Finance, 5, 1-34. doi:10.1080/23322039.2017.1418609

Mohohlo, M.T., & Hall, J.H. (2018). The impact of operating leveareg on the capital structure of Johannesburg stock exchange-listed firms before and after the 2008 global financial crisis. Journal of Economic and Financial Sciences, 11(1), 1-10.

Mostarac, E., & Petrovic, S. (2013). Determinants of capital structure of Croatian enterprises before and during the financial crisis. UTMS Journal of Economics, 4(2), 153-162.

Myers, S.C., & Majluf, N.S. (1984). Corporate financing and investment decision when firms have information that investors do not have. J Economics, 13(2), 187-221.

Nouira, A., & Bellouma, M. (2019). Capital structure in Mena Region: A panel data analysis. International Research Journal of Applied Finance, 10(2), 69-83.

Pahuja, A., & Sahi, A. 2012. Factors affecting capital structure decisions: Empirical evidence from selected Indian firms. Financial, industrial and management research, 1(3), 77-86.

Petriella, Y. (2020). Konsumsi listrik berkurang, PLN diprediksi rugi Rp7 triliun Retrieved from Bisnis.com website: www.ekonomi.bisnis.com

Primadhanny, R. (2016). Pengaruh struktur kepemilikan terhadap struktur modal pada perusahaan sektor pertambangan yang tercatat di BEI periode 2010-2014. Jurnal Ilmu Manajemen, 4(3), 1-9.

Santiago, I., Moreno-Munoz, A., Quintero-Jimenez, P., Garcia-Torres, F., & Gonzales-Redondo, M.J. (2021). Electricity demand during pandemic times: The case of the covid-19 in Spain. Energy Policy, 148, 1-17. doi:10.1016/j.enpol.2020.111964

Siregar, S.V., & Bachtiar, Y. (2010). Corporate social reporting: empirical evidence from Indonesia strock exchange. International Journal of Islamic and Middle Eastern Finance and Management, 3(3), 241-252.

Sutomo, S., Wahyudi, S., Pangestuti, I.R.D., & Muharam, H. (2020). The determinants of capital structure in coal mining industry on the Indonesia Stock Exchange. Investment Management and Financial Innovations, 17(1), 165-174.

Thai, A. (2017). The effect of foreign ownership on capital structure in Vietnam. Review of Integrative Business and Economics Research, 8(1), 20-32.

Udomsirikul, P., Seksak, J., & Pornsit, J. (2011). Liquidity and capital structure: The case of Thailand. Journal of Multinational Financial Management, 21(2), 106-117.

Ufo, A. (2015). Impact of financial distress on the leverage of selected manufacturing firms of Ethiopia. Industrial engineering letters, 5(10), 6-11.

Wang, W., & Zhang, C. (2018). Evaluation of relative technological innovation capability: Model and case study for China's coal mine. Resources Policy, 58, 144-149. doi:10.1016/j.resourpol.2018.04.008

Wronska-Bukalska, E., & Mazurkiewicz, K. (2018). Corporate capital structure changes during financial crisis: Case of polish companies. Managing Global Transitions, 16(1), 19-35.




DOI: https://doi.org/10.26905/jkdp.v26i1.6872

Refbacks

  • There are currently no refbacks.


Bookmark and Share


Jurnal Keuangan dan Perbankan (Journal of Finance and Banking)

Diploma Program of Banking and Finance, Faculty of Economics and Business, University of Merdeka Malang

Published by University of Merdeka Malang

Mailing Address:
2nd floor Finance and Banking Building, Jl. Terusan Raya Dieng No. 57 Malang, East Java, Indonesia
Phone: -
Email: [email protected]

This work is licensed under a Creative
Commons Attribution-ShareAlike 4.0