From Assets to Advantage: The Debt-Driven Profit Engine of Indonesia's Manufacturing Firms

• 발행기관: People & Global Business Association
• 저자명: Eka Handriani Narariya Dita Handani
• 간행물 정보: 『Global Business and Finance Review』Vol.30 No.7, 29~41쪽, 전체 13쪽
• 주제분류: 경제경영 > 경영학
• 파일형태: PDF
• 발행일자: 2025.07.31

국문 초록

Purpose: This study explores the relationship between debt, profitability, and firm-specific characteristics, including growth, asset tangibility, company age, and company size, in Indonesian manufacturing companies. It examines both the direct and indirect effects of debt on profitability, focusing on how these factors influence the effective use of debt. Design/methodology/approach: Path analysis was used to examine the relationships between debt, profitability, and firm-specific attributes. Data from 330 manufacturing companies listed on the Indonesia Stock Exchange (IDX) from 2012 to 2023 were analyzed using LISREL software to assess both direct and mediated effects of the variables on profitability through debt. Findings: The results show that company growth does not significantly influence profitability through debt. However, both asset tangibility and company size have significant indirect effects on profitability via debt, indicating that larger companies with more tangible assets leverage debt more effectively. Additionally, company age positively affects both debt and profitability, suggesting that older companies manage debt more efficiently to enhance financial performance. Research limitations/implications: This study focuses on the Indonesian manufacturing sector, which may limit generalizability to other industries or regions. However, the findings provide valuable insights for emerging markets, particularly regarding how asset tangibility and company size influence debt use. Future research should expand to other sectors and regions, and explore how these relationships evolve over time. Originality/value: This study contributes to the literature by focusing on the Indonesian manufacturing sector, a market often overlooked compared to other emerging economies. Unlike much existing research that primarily uses primary data, this study utilizes secondary data from publicly listed companies over an extended period. The distinct contribution of this study lies in its focus on the indirect effects of firm-specific factors on profitability through debt, particularly the roles of asset tangibility and company size in leveraging debt to enhance financial performance.

목차

I. Introduction

II. Literature Review

III. Methodology

IV. Results and Findings

V. Discussion and Implications

VI. Conclusion

References

키워드

Capital Structure Theory Debt Financing Company Performance Asset Tangibility Company Size Profitability Manufacturing Company