The Moderation Effect of Competitive Strategy on The Relationship Between Debt Levels and Firm Performance

Authors

  • Dhia Shofiah Mardiana Universitas Airlangga, Indonesia, Indonesia

DOI:

https://doi.org/10.29040/jap.v23i2.6472

Keywords:

debt level, competitive strategy, firm performance

Abstract

Among the most important factors in achieving sustainable performance is the determination of capital structure. An optimal capital structure strikes a balance between risk and return received so as to improve firm performance. The purpose of this study was to examine and analyze the effect of debt level on firm performance with competitive strategy as the moderator. This study focused on businesses that were listed on the Indonesia Stock Exchange between 2015 and 2019. 62 companies were chosen as samples using the purposive sampling method, yielding 277 observations. Multiple regression analysis and moderated regression analysis were used to analyze the data. This study found that debt level has a negative effect on firm performance, and that competitive strategy moderates the influence of debt level on firm performance.

Author Biography

Dhia Shofiah Mardiana, Universitas Airlangga, Indonesia

Accounting

References

Ahmed, F., Awais, I., & Kashif, M. (2018). Financial Leverage and Firms’ Performance : Empirical Evidence from KSE-100 Index. Etikonomi, 17(1), 45–56.

Arping, S., & Lóránth, G. (2006). Corporate leverage and product differentiation strategy. Journal of Business, 79(6), 3175–3207. https://doi.org/10.1086/505253

Dinh, H. T., & Pham, C. D. (2020). The effect of capital structure on financial performance of Vietnamese listing pharmaceutical enterprises. Journal of Asian Finance, Economics and Business, 7(9), 329–340. https://doi.org/10.13106/JAFEB.2020.VOL7.NO9.329

Fosu, S., Danso, A., Ahmad, W., & Coffie, W. (2016). Information asymmetry, leverage and firm value: Do crisis and growth matter? International Review of Financial Analysis, 46, 140–150. https://doi.org/10.1016/j.irfa.2016.05.002

Ghozali, I. (2018). Aplikasi Analisis Multivariate dengan Program IBM SPSS 25 (9th ed.). Badan Penerbit Universitas Diponegoro.

Gitman, L.J.; Zutter, C. . (2012). Principles of Managerial Finance (13th ed.). Pearson.

Jensen, C., & Meckling, H. (1976). THEORY OF THE FIRM : MANAGERIAL BEHAVIOR , AGENCY COSTS AND OWNERSHIP STRUCTURE I . Introduction and summary In this paper WC draw on recent progress in the theory of ( 1 ) property rights , firm . In addition to tying together elements of the theory of e. 3, 305–360.

Jensen, M. C. (1989). Eclipse of the Public Corporation Eclipse of the Public Corporation. Harvard Business Review, 67, 61–74.

Jermias, J. (2008). The relative influence of competitive intensity and business strategy on the relationship between financial leverage and performance. The British Accounting Review, 40, 71–86.

Modigliani, F., & Miller, M. H. (1963). Corporate income taxes and the cost of capital: A correction. American Economic Review, 53, 433–443.

Mohammad, H. S., Bujang, I., & Hakim, T. A. (2019). Capital structure and financial performance of Malaysian construction firms. Asian Economic and Financial Review, 9(12), 1306–1319. https://doi.org/10.18488/journal.aefr.2019.912.1306.1319

Myers, S. C. (1984). The Capital Structure Puzzle. The Journal of Finance. https://doi.org/10.2307/2327916

Porter, M. (1980). Competitive Strategy: Techniques for Analyzing Industries and Competitors. Free Press.

Singh, P., & Agarwal, N. C. (2002). The effects of firm strategy on the level and structure of executive compensation. Canadian Journal of Administrative Sciences, 19(1), 42–56. https://doi.org/10.1111/j.1936-4490.2002.tb00668.x

Downloads

Additional Files

Published

2022-10-23

How to Cite

Mardiana, D. S. (2022). The Moderation Effect of Competitive Strategy on The Relationship Between Debt Levels and Firm Performance. Jurnal Akuntansi Dan Pajak, 23(2). https://doi.org/10.29040/jap.v23i2.6472

Issue

Vol. 23 No. 2 (2023): JAP : Vol. 23, No. 2, Agustus 2022 - Januari 2023

Section

Articles

Citation Check

License

The copyright of the article fully belongs to the Jurnal Akuntansi dan Pajak and publishing rights belong entirely to LLPM STIE AAS Surakarta 

 Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License.

Similar Articles

1 2 3 4 5 6 7 8 9 10 > >> 

You may also start an advanced similarity search for this article.