Institutional Role and Foreign Ownership in Capital Structure Decisions in Managerial Ownership Companies

Abstract

The manager will conduct power voting by more preferring the use of equity rather than debt. Therefore, the purposes of this research are (a) is there any capital structure decision differences in managerial ownership companies after the presence of institutional ownership (b) is there any capital structure decision differences in managerial ownership companies after the presence of foreign ownership. The research data were from the recorded companies in the Indonesian Stock Exchange 2009-2018. The data of 22 companies with managerial ownership, the data of 198 managerial ownership companies after the presence of institutional ownership, the data of 86 companies with managerial ownership with the presence of foreign ownership were collected. The result of the research showed that there were no significant differences in capital structure decisions of managerial ownership companies after the presence of institutional and foreign ownership. The role of monitoring towards managerial ownership companies was not effective, because of the asymmetry information and family ownership structure affiliated direction.