The Role of Capital Structure and Innovation in Corporate Performance Utilizing Firm Size as Moderation: Study of Manufacturing Companies Listed on the IDX

Abstract

This study examined the effect of capital structure and innovation on the corporate performance of manufacturing companies listed on the IDX. This study examined firm size moderation on the effect of capital structure and innovation on corporate performance. The research sample was manufacturing companies listed on the Indonesia Stock Exchange in the 2013 - 2017 period. The sampling method utilized was the purposive sampling technique. Data analysis used WarpPLS. The research result exhibited capital structure has a significant effect on innovation. Capital structure and innovation have a significant effect on corporate performance. Innovation has a significant effect on corporate performance. Firm size as a moderating variable strengthened the effect of innovation on corporate performance. Research result exhibits new findings as there is no research utilizing firm size as moderation on the effect of innovation on corporate performance. Research result exhibited that firm size does not moderate capital structure influence on corporate performance.

Keywords: Capital structure, innovation, firm size, corporate performance.

DOI: 10.7176/RJFA/11-4-01

Publication date: February 29^th 2020