What Drives Capital Structure ? Evidence From Manufacturing Firms in Indonesia

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Analysis reveals significant effects of profitability and liquidity on capital structure, highlighting implications for debt management.

Profitability and liquidity significantly negatively impact capital structure in Indonesian manufacturing firms.
Asset tangibility has a significant positive effect on capital structure, indicating its importance for financing decisions.
The analysis is based on data from 140 manufacturing companies over seven years using panel data regression.
The findings support the pecking order theory, emphasizing the significance of internal financial strength.

Malelak et al. (2025) studied this question.

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