International Journal of Recent Technology and Engineering (IJRTE)

ISSN: 2277-3878 (Online), Volume-9 Issue-1, May 2020

Effect of Shareholding Structure, Internal

Factors, External Factors on Capital Structure
and Value of the Company in Manufacturing
Company in Indonesia Stock Exchange
Purwito Kesdu Asmoro Cipto, Achmad Choerudin

shareholders, Bringham and Gapenski (1996). Problems

Abstract: This research examined the influence of ownership capital structure is a very important issue for any company,
structure, internal factor, external factor and capital structure because of the good and bad capital structure will have a
on value of the manufacturing firm in Indonesia Stock direct effect on the financial position of the company. A
Exchange. This is argue that unlike the agency problem in company which has a bad capital structure and a huge debt
developed stock market, the agency problem in Indonesia Stock
Exchange is the divergence of interest between the minority
will give a great burden to the companies concerned
holders and majority holders. This is because the Indonesia Stock (Chaganti and Damanpour, 1991).
Exchange is characterized among other things, by the The Ownership structure illustrates the composition of
domination of large shareholder. It is hypothesis that: there are government ownership, institutional or public, foreign, or
the impact of ownership structure, internal factor, external factor managerial families of a company. The ownership structure
on capital structure, there are the impact of ownership structure, is believed to influence the course of the company, which in
internal factor, and external factor on value of the firm, there are turn affect the company's performance in achieving the
the impact of capital structure on value of the firm. Results of company's goal to maximize the value of the company.
this study hope to contribute theoritically and practically. Variables in the group of internal factors that can be
Theoretically contribution is bounded to examine the Agency
Theory, Trade off Theory and Signalling Theory. Results of the
identified in several indicators, among others, ie, liquidity,
study to indicate that practice public company In Indonesia Stock profitability, activity and growth. Indicators of liquidity is
Exchange is not support the Agency Theory and support Trade one of the internal variables that can be controlled by the
off theory and Signaling theory. Practical contribution is relative corporate management in running the business.
bounded in the institution, like BAPEPAM and The Indonesian Profit is an indicator of profitability or symbols used to
Stock Exchange Management. express the profitability turned out to be statistically
Keywords: ownership structure, internal factor, external significant at the alpha level of 1% (-24.28148). Indicators
factor, capital structure, value of the firm. of activity ratio according to Homaifar, Zietz, and Benkato
(1994), is a ratio that describes the activities of the company
I. INTRODUCTION in running its operations both in the activities of sales,
purchases and other activities. An indicator of growth,
The value of the firm is an important concept for investors according to Maurer and Triantis (1994) was how far
because it is an indicator of how the market is valuing the companies put themselves in the overall economic system or
company as a whole. The high value of the company will be economic system for the same industry. Inflation is an
followed by high prosperity of the shareholders (Brigham economic indicator that illustrates the falling value of the
and Gapenski, 1996). Value of the firms are also affected by rupiah, and the condition is characterized by increasing the
factors including the company's capital structure, the price of goods on the market. The interest rate is the price
relationship between the principal with management and the that must be paid on the loan capital and dividends and
company's ability to generate profit (Agrawal, 1994). The capital gains that result from equity capital (Hossein,
higher the value of the company, the higher the wealth of Massoud and Chadegani, 2013).
This study examines the effect of ownership structure,
internal and external factors on capital structure and on the
Manuscript received on April 02, 2020. value of the company as well as the effect of capital
Revised Manuscript received on April 20, 2020. structure on firm value. While previous studies have not
Manuscript published on May 30, 2020. integrated on the three latent variables such as determinant
* Correspondence Author
Dr. Purwito Kesdu Asmoro Cipto, MM*, management department, of capital structure and corporate value, and capital structure
STIE AUB Surakarta, Central Java, Indonesia. Email: as determinant of the value of the company. This study also
purwito.aub@gmail.com. examines the effect of each variable observable to capital
Dr. Achmad Choerudin, ST,SE,MM, management department, structure and corporate value. Observable variables
mechanical engineering, AT-AUB and STIE AUB Surakarta, Central Java,
Indonesia. Email: achmadchoerudin77@yahoo.co.id. ownership structure consists of managerial ownership and
institutional ownership.
© The Authors. Published by Blue Eyes Intelligence Engineering and
Sciences Publication (BEIESP). This is an open access article under the CC
BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/)

Retrieval Number: E6796018520 /2020©BEIESP Published By:

DOI:10.35940/ijrte.E6796.059120 Blue Eyes Intelligence Engineering
Journal Website: www.ijrte.org 1854 & Sciences Publication
Effect of Shareholding Structure, Internal Factors, External Factors on Capital Structure and Value of the Company
in Manufacturing Company in Indonesia Stock Exchange

Observable variable internal factors consist of: liquidity, economic indicator that illustrates the falling value of the
profitability, activity and growth. Observable variable rupiah, and the condition is characterized by increasing the
external factors consist of: interest rates, foreign exchange price of goods on the market. The interest rate is the price
rates, and inflation. On the basis of previous empirical that must be paid on the loan capital and dividends and
studies theoretically be strong reasons researchers to capital gains that result from equity capital (Hossein,
conduct research with the theme effects of shares ownership Massoud and Chadegani, 2013).
structure, internal factors, external factors against capital This study examines the effect of ownership structure,
structure and corporate value. internal and external factors on capital structure and on the
Based on the above-mentioned problem, the problem is value of the company as well as the effect of capital
formulated as follows: (1) Does the ownership structure structure on firm value. While previous studies have not
significantly influence the capital structure Manufacturing integrated on the three latent variables such as determinant
Company in Indonesia Stock Exchange?, (2) Does the of capital structure and corporate value, and capital structure
internal factors have a significant effect on the capital as determinant of the value of the company. This study also
structure Manufacturing Company in Indonesia Stock examines the effect of each variable observable to capital
Exchange?, (3) Does external factors have a significant structure and corporate value. Observable variables
effect on the capital structure Manufacturing Company in ownership structure consists of managerial ownership and
Indonesia Stock Exchange?, (4) Does the ownership institutional ownership. Observable variable internal factors
structure significantly influence the value of the company in consist of: liquidity, profitability, activity and growth.
Manufacturing Company in Indonesia Stock Exchange?, (5) Observable variable external factors consist of: interest
Does the internal factors significantly influence the value of rates, foreign exchange rates, and inflation. On the basis of
the company in Manufacturing Company in Indonesia Stock previous empirical studies theoretically be strong reasons
Exchange?, (6) Does the external factors significantly researchers to conduct research with the theme effects of
influence the value of the company in Manufacturing shares ownership structure, internal factors, external
Company in Indonesia Stock Exchange? As well as (7) Does factors against capital structure and corporate value.
the capital structure significantly influence the value of the Based on the above-mentioned problem, the problem is
company in Manufacturing Company in Indonesia Stock formulated as follows: (1) Does the ownership structure
Exchange? significantly influence the capital structure Manufacturing
The value of the firm is an important concept for investors Company in Indonesia Stock Exchange?, (2) Does the
because it is an indicator of how the market is valuing the internal factors have a significant effect on the capital
company as a whole. The high value of the company will be structure Manufacturing Company in Indonesia Stock
followed by high prosperity of the shareholders (Brigham Exchange?, (3) Does external factors have a significant
and Gapenski, 1996). Value of the firms are also affected by effect on the capital structure Manufacturing Company in
factors including the company's capital structure, the Indonesia Stock Exchange?, (4) Does the ownership
relationship between the principal with management and the structure significantly influence the value of the company in
company's ability to generate profit (Agrawal, 1994). The Manufacturing Company in Indonesia Stock Exchange?, (5)
higher the value of the company, the higher the wealth of Does the internal factors significantly influence the value of
shareholders, Bringham and Gapenski (1996). Problems the company in Manufacturing Company in Indonesia Stock
capital structure is a very important issue for any company, Exchange?, (6) Does the external factors significantly
because of the good and bad capital structure will have a influence the value of the company in Manufacturing
direct effect on the financial position of the company. A Company in Indonesia Stock Exchange? As well as (7) Does
company which has a bad capital structure and a huge debt the capital structure significantly influence the value of the
will give a great burden to the companies concerned company in Manufacturing Company in Indonesia Stock
(Chaganti and Damanpour, 1991). Exchange?
The Ownership structure illustrates the composition of
government ownership, institutional or public, foreign, or II. OBJECTIVE AND BENEFITS RESEARCH
managerial families of a company. The ownership structure
The aim of this study is to test empirically: (a) Effect of
is believed to influence the course of the company, which in
ownership structure on the capital structure Manufacturing
turn affect the company's performance in achieving the
company's goal to maximize the value of the company. Company in Indonesia Stock Exchange, (b) Internal factors
Variables in the group of internal factors that can be influence the capital structure of the company
Manufacturing Company in Indonesia Stock Exchange, (c)
identified in several indicators, among others, ie, liquidity,
The influence of external factors on capital structure
profitability, activity and growth. Indicators of liquidity is
Manufacturing Company in Indonesia Stock Exchange, (d)
one of the internal variables that can be controlled by the
Share ownership structures that influence the value of the
relative corporate management in running the business.
Profit is an indicator of profitability or symbols used to company on the Stock Exchange Manufacturing Company
express the profitability turned out to be statistically in Indonesia, (e) Internal factors influence the value of the
company on the Stock Exchange Manufacturing Company
significant at the alpha level of 1% (-24.28148). Indicators
in Indonesia, (f) The influence of external factors on the
of activity ratio according to Homaifar, Zietz, and Benkato
value of the company on the Stock Exchange Manufacturing
(1994), is a ratio that describes the activities of the company
Company in Indonesia, and (g) The influence of capital
in running its operations both in the activities of sales,
purchases and other activities. An indicator of growth, structure on firm value on Manufacturing Company in
according to Maurer and Triantis (1994) was how far Indonesia Stock Exchange.
companies put themselves in the overall economic system or
economic system for the same industry. Inflation is an

Retrieval Number: E6796018520 /2020©BEIESP Published By:

DOI:10.35940/ijrte.E6796.059120 Blue Eyes Intelligence Engineering
Journal Website: www.ijrte.org 1855 & Sciences Publication
 International Journal of Recent Technology and Engineering (IJRTE)
ISSN: 2277-3878 (Online), Volume-9 Issue-1, May 2020

The benefits of this research are (a) As a basic policy of acquisition of new businesses, investments in working
capital structure in determining the proportion of funding capital.
sources of debt and equity for companies manufacturing in Modigliani and Miller (1958) argued in the first proposition,
Indonesia Stock Exchange, (b) As a basis for improvement that the value of each company is capitalized net operating
of the performance of the company to increase the value of income expected or expected net operating income (NOI =
industrial manufacturing company in Indonesia Stock EBIT) with a capitalization rate constant corresponding to
Exchange, and (c) Provide input for the institution in the level of risk the company. Required level of profits and
Indonesian capital market regulator in making policies and the value of the company for which one hundred percent
regulations, particularly to protect investors and minority capital consists of equity or unlevered firm, according to
shareholders. Modigliani and Miller (1961) did not depend on or are not
influenced by the structure. In the second proposition,
III. REVIEW OF LITERATURE Modigliani and Miller found that the company's own capital
costs have leverage is equal to the cost of equity capital
The company's main purpose is to increase corporate value
companies which do not have the leverage plus a risk
through increased prosperity of the owners or shareholders premium. The size of the risk premium depends on the
(Bathala, Moon and Rao, 1994),). To increase the value of difference between the cost of equity and cost of debt
the company by way of setting the company's financial
companies that have leveraged multiplied by the amount of
activities, called financial management. Financial
the debt by not account for taxes or no taxes under
management involves planning, analysis and control of the
conditions (T = 0). This was confirmed by Slovin, Myron
financial activities undertaken by financial managers.
and Sushka, (1993): If the larger corporate debt, the cost of
Financial management can be grouped into two main equity capital is also getting bigger. This is because the risks
activities, namely the activities of the funds and activities faced by the owners of their own capital grew, so the owners
seek sources of funding, which is often referred to as a
of capital companies expect the level the greater the profit.
function of financial management (Gowey GT. And Hanka
According to Fischer and Heinkel (1989) has the intrinsic
Gordon, 1999). Decisionin finance principle involves three
value of a security that the price adjustment for securities
things, namely investment decisions, a decision the when the primary factors of the value note. Intrinsic value
fulfillment of funding (financing decision), and the decision shows the present value of the expected cash flows of the
of profit distribution.
stock. In the structure of share ownership to be shot for
According to the agency theory (Jensen and Meckling,
Managerial Ownership and Institutional Ownership,
1976), stated that the company separates the functions of
research on the relationship of share ownership structure
management with ownership function would be vulnerable
with the company's capital structure has done a lot of
to the agency conflict. The causes of conflict between research. The study is generally used as an element of
managers and shareholders of which are related to the managerial ownership and the ownership structure they
decision-making; (1) fund raising activities (financing
found different results.
decision) and (2) Decision-making relating to how the
The internal factors consist of liquidity, profitability and
proceeds are invested. Thus Managerial Ownership and
growth activity: (a). The company's liquidity relating to the
Institutional investors can influence the decision of whether
company's ability to meet its short term obligations, (b)
the fund raising through debt or right issue. If funding is
obtained through debt means debt-to-equity ratio will Profitability reflects the company's ability to generate
increase, so that ultimately will increase the risk. profits, and (c) Growth according Domian, Gilster, and
Rajan and Zingales (1995) developed a theoretical model Louton (1996) was how far companies put themselves in the
and signalling Companies that have good fundamental overall economic system or economic system for the same
factors such as high liquidity, high profitability, high ratio industry. Eksteral factors are difficult to control by the
activity and earnings growth, high dividend and assets company. External factors consist of the development of the
showed a signal to creditors that the company has good SBI interest rate, foreign exchange rate and inflation: (a)
fundamentals so that lenders will be more confident in The interest rate used is the SBI interest rate as the
giving credit. Besides, a good fundamental performance is benchmark interest rate to determine the macro-economic
also considered as a signal about the prospects of a good stability, (b) Foreign currency exchange rates used to
company so that investors will be interested in buying shares determine the macroeconomic stability related to the
of the company as such. Companies that have a large debt is international balance of payments position and the current
also a signal of the company entrusted by creditors so that account deficit, (c) Inflation is used to measure the extent to
investors will respond positively to the company believed which people's purchasing power in the purchase of goods
the investor. and shows how far the competitiveness of enterprises in
The value of the company with regard to the flow of determining the selling price after considering the factors of
earnings/cash flow generated where cash flow can be production costs.
derived from operating activities, financing activities and
investing activities as proposed by Leland and Toft (1996),
IV. METHOD OF RESEARCH
which is described as follows: (1) Operating activities, such
as sales growth in sales, payments to suppliers, employee, This study population is a manufacturing company listed on
taxes and interest, (2) Financing activities such as the the Indonesia Stock Exchange (BEI).
issuance of new debt, new debt issuance, the issuance of
new preferred stock issuance of new ordinary shares, and
dividend payments, (3) Investing activities, such as new
investment in land, plant and equipment, as well as the

Retrieval Number: E6796018520 /2020©BEIESP Published By:

DOI:10.35940/ijrte.E6796.059120 Blue Eyes Intelligence Engineering
Journal Website: www.ijrte.org 1856 & Sciences Publication
Effect of Shareholding Structure, Internal Factors, External Factors on Capital Structure and Value of the Company
in Manufacturing Company in Indonesia Stock Exchange

The sampling technique used by the authors is non- External

H6 factor(X3) → -0.318 0.001 Significant
probability sampling. According to Hair et al., (1995), as
firm value(Y2)
well as Indriantoro and Supomo (1999), non-Probability Share structure
Sampling is a sampling technique that does not provide H7 (Y1) → firm -0.319 0.002 Significant
opportunities or equal opportunity for each element or value(Y2)
member of the population to be selected into the sample. In
this study into consideration in the selection of the sample Source : Primary Data, 2012.
are those companies that meet the following criteria: Information obtained in Table 2 above will serve to guide
the test hypothesis is as follows: (a) Effect of ownership
Table 1. Sample Selection Criteria structure on the capital structure, Path coefficient ownership
Sample selection criteria Number of structure influences the capital structure is of 0.026 with p
Firm value 0.006 <0.050. The results support the first hypothesis
Manufacturing companies listed on the Stock 131
Exchange consistently from year 2010-2012
(H1) and can be accepted as true. (b). Internal factors
Manufacturing companies that do not pay dividends (27) influence the capital structure, Path coefficient of internal
consistently factors influence companies on capital structure amounted to
Companies that do not have institutional ownership (15) 0.068 with p value of 0.004 <0.05. Results of this study
Companies that do not have managerial ownership (14) support the second hypothesis (H2) and can be accepted as
Total Sample 75
true. (c) The influence of external factors on capital
Source : BEI (2012)
structure, Path coefficient influence of external factors on
In this study there were five concepts studied, namely the
the capital structure is at -0452 with p value 0.006 <0.05. (d)
shareholding structure, internal factors, external factors,
The results support the third hypothesis (H3) and can be
capital structure and corporate value, which is divided into
accepted as true, Path coefficient influence the shareholding
two three endogenous variables and exogenous variables.
structure of the company's value is equal to 0214 with 0.005
Data used as research material is secondary data, which
p value <0.05. The results support the hypothesis fourth
consists of: (1). Inflation end of 2010 to 2012, (2). Summary
(H4) and can be accepted as true. (e) Internal factors
financial data in ICMD particularly manufacturing firms
influence the value of the company, Path coefficient
from 2010 to 2012, (3). The rupiah against the US dollar late
company's internal factors influence the value of the
in 2010 until 2012, and (4). The SBI interest rate during
company is equal to 0.922, with p value 0.006 is less than
2010 to 2012. This study uses analysis tools with Structural
the alpha level 0:05. The results support the hypothesis fifth
Equation Modeling (SEM) the reason are: (1). In terms of
(H5) and can be accepted as true. (f) The influence of
the model form, look for causality for example tiered capital
external factors on the value of the company, Path
structure so to asset productivity, financial performance and
coefficients external factors on the value of the company is
corporate value. With so many relationships and existing
equal to -0318 with p value 0.001. The results support the
levels, can only be solved with the help of the form of
hypothesis sixth (H6) and can be accepted as true, (g) The
structural models that Structural Equation Modeling (SEM),
influence of capital structure on firm value, The path
(2). Of the variables that exist, there is a latent variable
coefficients influence of capital structure on firm value is
.With the latent variables in the model, then the method of
equal to -0319 with a p value of 0.002. The results support
analysis that can be used only Structural Equation Modeling
the hypothesis seventh (H7) and can be accepted as true.
(SEM).
Effect of shares ownership structure through the capital
structure on firm value. The direct effect of share ownership
V. RESULT AND DISCUSSION structure on firm value obtained significant coefficient of
Based on the criteria, then there are 75 companies that meet 0.214, while the indirect influence of X 0.026 (-0.319) = -
the requirements and at the same time as the sample in this 0.0083, so in order to increase the value of the company
study. Data were collected from 75 companies during the more effectively through direct influence as a score greater
three years from 2010 until 2012, so we get the data pooling coefficient (0.214 significant ), while through the mediation
analysis unit n = 3 x 75 = 225. Thus the major assumptions of the capital structure, the effect of visual significant.
n desired method of data analysis with SEM, namely n = The influence of internal factors through the capital
100, can fulfilled. structure on firm value. The direct effect of factors internal
The results ofthe evaluation model shows that the model is to the firm value obtained significant coefficient of 0.992,
fit to be used further analysis. while the indirect effect of 0.068 x (-0.319) = -0.021692, so
Table 2. Hypothesis Testing Results in order to increase the value of the company more
Variable
Coefficient
P-
Explanation
effectively through direct influence as a score greater
relationship Value coefficient (significant .992) , while through the mediation
SKS(X1)→share of the capital structure, the effect of visual significant.
H1 0.026 0.006 Significant
structure(Y1)
Intern factor
The influence of external factors through the capital
H2 (X2)→share 0.068 0.004 Significant structure on firm value. The direct influence of external
structure (Y1) factors on firm value obtained coefficient of - 0.318
External factor significantly, while the indirect effect of (-0.452) X (-0.319)
H3 (X3)→share -0.452 0.006 Significant = -0.1442, so in order to enhance the corporate value of both
structurel(Y1)
SKS(X1)→firm
line is not effective, because it has a negative sign,
H4 0.214 0.005 Significant
value (Y2)
Internal
H5 factor(X2)→firm 0.922 0.006 Significant
value(Y2)

Retrieval Number: E6796018520 /2020©BEIESP Published By:

DOI:10.35940/ijrte.E6796.059120 Blue Eyes Intelligence Engineering
Journal Website: www.ijrte.org 1857 & Sciences Publication
 International Journal of Recent Technology and Engineering (IJRTE)
ISSN: 2277-3878 (Online), Volume-9 Issue-1, May 2020

Direct influence with the score coefficient (-0.318 Internal factor→ Firm value 0,992**
significant), whereas through the mediation of capital External →firm value -0,318**
Capital ownership structure→ Share 0,026 X (-
structure, the effect of -0.021692 not significant. That structure→ firm value 0,319) = -
means, in order to increase the value of the company both 0,0083
lanes are not effective. Based on the results of the above Internal factor→ Share structure→firm 0,068 X (-
discussion relating to the results obtained from the research value 0,319) = -
0,021692
hypothesis testing. Relationships between variables
External factor→ Share structure→ firm (-0,452) X
research, either directly or indirectly, can be structured as value (-0,319) = -
follows: 0,1442
Table 3. Effect of Direct and Indirect Influence Source : Primary Data, 2012.
Coefficient line (P value)
The influence/relationship (Direct (Indirect Based on the results of the study hypothesis testing can
Effect) Effect)
Capital ownership structure→ Firm 0,214**
visualize the results after the Model of SEM below:
Value

Indonesia Stock Exchange, so the hypothesis 7 (H7) can be

VI. CONCLUSION
accepted as true. Practical Findings are (1) It can be
Based on the previous description, it can be seen that in this recommended is that managers need to pay attention to the
study produced some findings as (1) Variable share importance of policy settings ownership structure,
ownership structure significantly influence the capital ownership both institutional and managerial ownership will
structure on manufacturing companies listed on the Jakarta have a direct impact on the increase in value of the
stock exchange. So the first hypothesis (H1) can be accepted company, which is reflected in the PER and PBV, the better,
as true, (2) Variable factors significantly influence the (2) This recommendation needs to be considered is the
company's internal capital structure at manufacturing importance of setting internal factors, because these factors
companies on the stock exchanges in Indonesia. So can be controlled entirely by the manager that includes
Hypothesis 2 (H2) can be accepted as true, (3) Variable liquidity ratios, profitability ratios, activity ratios, and the
external factors significantly influence the capital structure ratio of the company's growth. (3) Various things macro
at a manufacturing company in Indonesia Stock Exchange, conditions can not be controlled and controlled by the
so the hypothesis 3 (H3) can be accepted as true, (4) manager (external factors) and capital structure to enhance
Variable ownership structure significantly influence the shareholder value is not effective. This macro conditions can
value of the company at a manufacturing company in the not be controlled by management, then on the condition
Indonesia Stock Exchange, thus hypothesis 4 (H4) can be manajemenlebih focus on improving the structure of
accepted as true, (5) Variable internal company factors ownership and internal factors that can be conducted by
significantly influence the value of the company at a management This study still has some limitations that are
manufacturing company in Indonesia Stock Exchange, so likely to weaken the results. These limitations include the
the hypothesis 5 (H5) can be accepted as true, (6) Variable following: (a). The sample used is limited to manufacturing
external factors significantly influence the value of the companies listed in Indonesia Stock Exchange that publish
company at a manufacturing company in Indonesia Stock financial statements
Exchange, so the hypothesis 6 (H6) can be accepted as true,
(7) Variable capital structure significantly influence the
value of the company at a manufacturing company in

Retrieval Number: E6796018520 /2020©BEIESP Published By:

DOI:10.35940/ijrte.E6796.059120 Blue Eyes Intelligence Engineering
Journal Website: www.ijrte.org 1858 & Sciences Publication
Effect of Shareholding Structure, Internal Factors, External Factors on Capital Structure and Value of the Company
in Manufacturing Company in Indonesia Stock Exchange

In the period 2010 to 2012. The company is listed on the 12. Jensen, M. and W. Meckling (1976), “Theory of the Firm:
Managerial Behaviour Agency Cost, and Ownership Structure”,
Stock Exchange is not only an industrial manufacturing
Journal of Finance Economics 3, 305-360.
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generalization to a public company, (b). A period of only Endogenous Bankruptcy, and the Term Structure of Credit Spreads”,
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14. Maurer DC, and Triantis Ad, (1994), “Interactions of Corporate
control the institutional stock ownership if the company is
Financing and Investment Decisions: A Dynamic Framework”, The
owned by another company, which may affect the value of Journal of Finance, Vol. XLIX, No. 4, pp. 1253-1277.
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factors that affect the likelihood that the relationship Structure? Some Evidence from International Data”, The Journal of
Finance, Vol. L, No. 5, pp. 1421-1460.
between ownership structure with the capital structure, for
16. Slovin, Myron B., and Marie E. Sushka, (1993), “Ownership
example the value of the company, managerial Concentration, Corporate Control Activity, and Firm Value: Evidence
compensation in accordance with the results of the testing from the Death of Inside Blockholders”, Journal of Finance, Vol.
data and discussion, it can be submitted suggestions to XLVII, No. 4.
management, as well as the phenomenon of these findings
for the investor as follows: (1). It can be recommended is AUTHORS PROFILE
that the owners need to pay attention to the importance of Dr. Purwito Kesdu Asmoro Cipto, SE, MM,
policy settings ownership structure, ownership both received the Doctor degrees in Faculty of
institutional and managerial ownership will have a direct Economics and Business from University of 17
Agustus, Surabaya, Indonesia. He stayed and active
impact on the increase in value of the company, which is in STIE AUB Surakarta, Central Java, Indonesia.
reflected in the PER and PBV, the better, (2). Management Active in research of management, financial and
needs to pay attention to the importance of setting internal society
factors, because these factors can be controlled entirely by
the manager that includes liquidity ratios, profitability ratios, Dr. Achmad Choerudin, ST,SE,MM, received
activity ratios, and the ratio of the company's growth and the Doctor degrees in Faculty of Economics and
(3). The owners and management are suggested to maintain Business from University of Sebelas Maret,
an optimal capital structure that has to be maintained, this Surakarta, Central Java, Indonesia. He stayed and
active in Akademi Teknologi AUB Surakarta,
condition mennujukan that the optimal capital structure of Central Java, Indonesia. Active in research of
the company's value increases. The next investigators can management, financial and society as well as
consider other factors that may affect the relationship reviewer in journal national and international.
between ownership structure, internal factors, external
factors with the capital structure and corporate value, such
leverage, managerial compensation / Executive Incentive
Plans, and Corporate Control..

ACKNOWLEDGMENT
Authors thanks STIE AUB and AT-AUB Surakarta,
Central Java, Indonesia, LPPM, BEI and stakeholders.

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Retrieval Number: E6796018520 /2020©BEIESP Published By:

DOI:10.35940/ijrte.E6796.059120 Blue Eyes Intelligence Engineering
Journal Website: www.ijrte.org 1859 & Sciences Publication