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Article
Publication date: 3 June 2024

Dewa Gede Wirama, Komang Ayu Krisnadewi, Luh Gede Sri Artini and Putu Agus Ardiana

Using the residual dividend theory, this study examines the impact of capital expenditures and working capital on the dividend policies of publicly listed companies in Indonesia.

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Abstract

Purpose

Using the residual dividend theory, this study examines the impact of capital expenditures and working capital on the dividend policies of publicly listed companies in Indonesia.

Design/methodology/approach

Using data on public companies (other than those in the financial sector) listed on the Indonesia Stock Exchange from 2011 to 2020, this study collected 870 observations (firm-years). This study employs a regression analysis technique using the STATA application program. The main variables in this study are capital expenditure and working capital, and the control variables are sales growth, firm size, leverage, profitability, liquidity and dummy variables for state-owned enterprises. The dependent variable of dividend policy is proxied by the dividend payout ratio.

Findings

This study’s results support the residual dividend theory’s hypothesis, in which capital expenditure negatively affects a company’s dividend policy. This study also analyzes this effect on companies that pay cash dividends at quantile positions of 25, 30, 50 and 60. The results show that the effect of capital expenditure on cash dividend payments is more pronounced in the case of companies whose cash dividends are in the 50th quantile. This result holds across different specification and endogeneity tests.

Originality/value

This study analyzes the residual dividend theory in Indonesian companies, focusing on localized factors and investment priorities. It challenges traditional Western dividend policies and provides empirical data that enhances the theory’s robustness. The findings have practical implications for investors, policymakers and corporate decision-makers in the Indonesian market.

Details

Asian Journal of Accounting Research, vol. 9 no. 3
Type: Research Article
ISSN: 2443-4175

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Article
Publication date: 24 August 2020

Luh Gede Sri Artini and Ni Luh Putu Sri Sandhi

The purpose of this study is to determine and compare the performance of small and medium enterprises (SME) and manufacturing company stock portfolios in the Indonesian, Chinese…

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Abstract

Purpose

The purpose of this study is to determine and compare the performance of small and medium enterprises (SME) and manufacturing company stock portfolios in the Indonesian, Chinese and Indian capital markets by the Sharpe Index and the significance of differences in average performance in the capital market.

Design/methodology/approach

This is comparative research that compared the performances of SME and manufacturing company stock portfolios in Indonesian, Chinese and Indian capital markets. The hypothesis examination of comparative test used one-way ANOVA technique on the performance of SME and manufacturing company stock portfolios in Indonesian, Chinese and Indian capital markets. One-way ANOVA test was used in the analysis to test the average difference of performance indices of SME and manufacturing company stock portfolios is in Indonesian, Chinese and Indian capital markets.

Findings

The performance of SME and manufacturing company stock portfolios in Indonesian capital market was not better than the performances of IHSG and LQ45 Index, the performance of SME and manufacturing company stock portfolios in Chinese capital market (SZSE) was better than the performance of Shenzhen Composite Index and the performance of Shenzhen A-Share Stock Price Index. The comparison of the performances of SME and manufacturing company stock portfolios in Indonesian, Chinese and Indian capital markets showed that the performance of SME and manufacturing company stock portfolios in Chinese capital market was the best and the performance of SME and manufacturing company stock portfolios in Indonesian capital market was the lowest.

Practical implications

The implication of this study was that SME and manufacturing company stock portfolios had relatively better performances in China and India, so investors should consider investing in SME and manufacturing company stocks. The performance of SME and manufacturing company stock portfolios in Indonesia was not able to exceed market and LQ45 portfolios, so the authority in Indonesia financial market should consider developing a special market for SME and manufacturing company to support the development of SME and manufacturing company in Indonesia and solve the problem of lack of funding source for SME and manufacturing company.

Originality/value

The originality of the present study is in the measurement of the performance of SME and manufacturing company stock portfolio by risk-adjusted return which returns per risk unit measured by Sharpe Index as a more beneficial measurement in measuring stock portfolio performance than average return. Comparative study of the stock portfolio performances of small medium enterprises and manufacturing company In Indonesian, Chinese and Indian stock markets, and object studies conducted in Indonesia, China and India.

Details

Journal of Economic and Administrative Sciences, vol. 37 no. 2
Type: Research Article
ISSN: 2054-6238

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Article
Publication date: 2 September 2020

I. Wayan Widnyana, I. Gusti Bagus Wiksuana, Luh Gede Sri Artini and Ida Bagus Panji Sedana

This study aims to analyze and explain the effect of financial architecture (with three dimensions: ownership structure, capital structure and corporate governance) and intangible…

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Abstract

Purpose

This study aims to analyze and explain the effect of financial architecture (with three dimensions: ownership structure, capital structure and corporate governance) and intangible assets on performance financial and corporate value in the Indonesian capital market.

Design/methodology/approach

This research was conducted on nonfinancial sector companies that were registered in the Indonesian capital market, namely Indonesia Stock Exchange (IDX) in 2015. This study used quantitative data and used secondary data sources, meaning that data were obtained, collected and processed from other parties. In this study, the hypothesis testing of the effect of financial architecture (included the dimensions of ownership structure, capital structure and corporate governance) and intangible assets on financial performance and corporate value using path analysis was performed.

Findings

The results of this study have provided findings that follow the research model that has been built (1) This research has been able to provide a theoretical model of the influence of financial architecture (with dimensions of ownership structure, capital structure and corporate governance), intangible assets, board processes on financial performance and company value in the Indonesian capital market. (2) To develop a theoretical model about the effect of corporate governance on financial performance in accordance with the two-tier system adopted by Indonesia. (3) An empirical study of the concept of financial architecture put forward by Myers (1999).

Originality/value

This research update lies in the research variable, which determines one value of the financial architecture variable comprehensively, combines the financial architecture variable and intangible assets to then be tested for its effect on company value and the use of the financial process variable as a board process as an intervening variable.

Details

International Journal of Productivity and Performance Management, vol. 70 no. 7
Type: Research Article
ISSN: 1741-0401

Keywords

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