August 16, 2025Open Access

Unveiling Dynamic Capital Structures on Manufacturing Firms: Insight from System GMM Estimation

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Research reveals key factors affecting capital structure in manufacturing firms, indicating impacts on leverage decisions.

High profitability negatively impacts leverage in Indonesian manufacturing firms, promoting reliance on internal financing.
Significant positive coefficient of lagged leverage indicates persistence in leverage decisions among firms.
Data from 159 publicly traded manufacturing firms were analyzed using Sys-GMM estimation for robust results.
Macroeconomic conditions and fiscal policies are found to positively influence the overall corporate leverage trend.

Werdaningtyas et al. (2025) studied this question.

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