Record Details

Debt Policy, Free Cash Flow Hypothesis, and balancing of Agency Theory Through Ownership: Evidence From Indonesia.

Ubaya Repository

View Archive Info
 
 
Field Value
 
Relation http://repository.ubaya.ac.id/236/
 
Title Debt Policy, Free Cash Flow Hypothesis, and balancing of Agency Theory Through Ownership: Evidence From Indonesia.
 
Creator Mahadwartha, Putu Anom
Ismiyanti, Fitri
 
Subject HB Economic Theory
 
Description This research argues that there is conflict of interest between managers and shareholders. The conflict also varies based on growth opportunities. This research argues that disciplinary role exist in debt policy with the use of free cash flow hypothesis. This research explores the implications of free cash flow hypothesis concerning the disciplinary role of ownership structure in corporate debt policy. Managerial ownership and internal institutional are other mechanism to reduce agency conflict also has a significant impact on debt policy. The relationship between managerial ownership, internal institutional ownership, and debt policy is interdependence, as known as balancing of agency theory. This study uses 1264 observation of 154 listed Indonesian firms between the years 1995 until 2003. Three state least square (2SLS) model will be use for statistical and analytical purposes. This study finds (1) the relationship between debt and free cash flow are positive, but the relation differ between low-growth firms and high-growth firms, (2) internal institutional shareholders as control mechanism of agency conflict will have negative relationship with deb (balancing of agency theory)t, (3) the balancing of agency theory also hold between managerial ownership and debt policy.
 
Publisher Virtus Interpress
 
Date 2008
 
Type Article
PeerReviewed
 
Format application/pdf
 
Language en
 
Identifier /236/1/Putu%20Anom_Dept%20Policy%2C%20Free%20Cash%20Flow%20Hypothesis_Abstrak_2008.pdf
Mahadwartha, Putu Anom and Ismiyanti, Fitri (2008) Debt Policy, Free Cash Flow Hypothesis, and balancing of Agency Theory Through Ownership: Evidence From Indonesia. Interntional Scientific Journal: Corporate Ownership & Control, 5 (2). pp. 256-263. ISSN 1727-9232