The Effects Of Environment Risk, Capital Structure, and Corporate Strategy on Assets Productivity, Financial Performance and Corporate Value: a Study on Go Public Companies Registered at Jakarta Stock Exchange
Abstract: This study was aimed
at: (1) examining the effects of environment risk consisted oi financial risk,
business risk and market risk on corporate strategy, capital structure, asset
productivity, financial performance and corporate value. (2) examining the
effects of corporate strategy consisted of liquidity, sales growth, assets
growth and growth potential on capital structure, assets productivity,
financial performance and corporate value. (3) examining capital on assets
productivity, financial performance and corporate value. The research was an
explanatory study. This study was an explanatory research. All companies
registered in Jakarta Stock Exchange in 2000-2004 periods were used as samples.
They were divided into main board category consisted of 71 emitters,
development board 62 emitters, and total board 134 emitters. Structural
Equation Model was used as analysis method. SPSS 11.5 and AMOS 5.0 were used
for processing data and allowing hypothetical tests to be performed. The
results indicated that: (1) investors expect main board companies to adopt free
cash flow whereas development board companies were expected to be more
conservative by adopting pecking order theory. Most Indonesian companies were
expected to adopt the latter. And, in fact, most of main, development, and
total board companies in Indonesia tend to adopt pecking order theory. (2) In
general, the increase of company's value was influenced by the increase of
corporate strategy and capital deduction, but the increase would be much more
higher if accompanied by raising assets productivity. For development board
companies in particular, the increase of company's value should be accompanied
by company's financial performance. (3) Creditors do not consider company's
financial risk in giving loans, this implies the increase of stacked credit.
(4) Investors do not trust company's financial performance report. (5)
Strategic management may provide help in explaining capital structure phenomena
with significant influence of corporate strategy on both capital structure and
company's value.
Key Words: Corporate Strategy,
Environment Risk, Capital Structure, Assets Productivity, Financial
Performance, Company's Value, financial risk, business risk market risk, sales
growth, assets growth, growth potential, liquidity, debt to equity ratio, debt
to assets ratio, equity to Assets ratio, return to assets ratio, basic earning
ratio, pecking order Theory, free cash flow theory
Author: Teddy Chandra
Journal Code: jpakuntansigg100026
