Decision of Cooperative Capital Structure, Profitability and Firm Value

Sugiyanto Sugiyanto

2017

Abstract

Capital structure theory explained by combination of capital sources are still rarely implemented in cooperatives enterprises especially in Indonesia, also cooperative financial managers have not been aware if this theory very importance. The purpose of this study is to investigate decision of cooperative capital structure and its impact on profitability and firm value. This research use statistical approach by using path analysis so that it can be known magnitude of direct and indirect impact between independent and dependent variables, this model is applied to test the panel threshold impact of cooperative capital structure on profitability and firm value from 2011 to 2015 with sample size 52 cooperatives in West Java using the simple random sampling technique. In this study, cooperative capital structure described by Debt to Asset Ratio (DAR), Profitability is described by Return on Equity (ROE) and Firm value described by ratio of cooperative permanent capital or capital allowance plus grant to total equity. The results of this study, decision of cooperative capital structure has a significant impact on profitability, and cooperative capital structure and profitability have impact on firm value either directly or indirectly, means capital structure theory also applicable on cooperative enterprises that have certain characteristics. Implication of this research, indicate that profitability and firm value can be improved by decision of cooperative capital structure through increasing debt capital sources, cooperative profitability and firm value can be leveraged by decision of capital structure.

Paper Citation

in Harvard Style

Sugiyanto S. (2017). Decision of Cooperative Capital Structure, Profitability and Firm Value.In Proceedings of the 2nd International Conference on Economic Education and Entrepreneurship - Volume 1: ICEEE, ISBN 978-989-758-308-7, pages 690-696. DOI: 10.5220/0006891706900696

in Bibtex Style

@conference{iceee17,
author={Sugiyanto Sugiyanto},
title={Decision of Cooperative Capital Structure, Profitability and Firm Value},
booktitle={Proceedings of the 2nd International Conference on Economic Education and Entrepreneurship - Volume 1: ICEEE,},
year={2017},
pages={690-696},
publisher={SciTePress},
organization={INSTICC},
doi={10.5220/0006891706900696},
isbn={978-989-758-308-7},
}

in EndNote Style

TY - CONF

JO - Proceedings of the 2nd International Conference on Economic Education and Entrepreneurship - Volume 1: ICEEE,
TI - Decision of Cooperative Capital Structure, Profitability and Firm Value
SN - 978-989-758-308-7
AU - Sugiyanto S.
PY - 2017
SP - 690
EP - 696
DO - 10.5220/0006891706900696