Asset Specifications, Financing Decisions and the Impact on Financial Performance: A Perspective of Economic Transaction Cost Theory

DOI

10.2991/aebmr.k.200606.032How to use a DOI?

Keywords

asset spesification, financing decision, financial performance, economic transaction cost

Abstract

The asset specification level determines the financing decision. Transaction theory suggests that assets with high specifications level are financed with debt, while assets with low specifications level should be financed with equity. This study aim is to analyze the effect of asset specification on debt financing decision and the impact on finances. Data was collected from manufacturing companies listed on Indonesian Stock Exchange for 2010 to 2017 period. Data analysis is multiple linear regression and probit regression. The findings showed that asset specification did not become basis for financing decisions. The high asset specification gives opportunity to make debt financing decision but the directions is reverse with theory. The study findings also showed that debt financing decision will decrease the financial performance if the company has high asset specification.

Copyright

© 2020, the Authors. Published by Atlantis Press.

Open Access

This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

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TY  - CONF
AU  - Nur Khusniyah Indrawati
PY  - 2020
DA  - 2020/06/09
TI  - Asset Specifications, Financing Decisions and the Impact on Financial Performance: A Perspective of Economic Transaction Cost Theory
BT  - Proceedings of the 23rd Asian Forum of Business Education(AFBE 2019)
PB  - Atlantis Press
SP  - 195
EP  - 200
SN  - 2352-5428
UR  - https://doi.org/10.2991/aebmr.k.200606.032
DO  - 10.2991/aebmr.k.200606.032
ID  - Indrawati2020
ER  -