Relationship Among Insider Ownership And Debt Based On The Agency Theory Of Manufacturing Companies Listed On The Jakarta Stock Exchange (For The Period Of 1999-2001)

Abstract

Arisiyanti, Marthalia Desy. Relationship Among Insider Ownership and Debt Based on Agency Theory of Manufacturing Companies Listed on The Jakarta Stock Exchange (For the Period of 1999-2001).Department of Accounting, International Program, Faculty of Economics, Islamic University of Indonesia. Jogjakarta. 2007. This research investigating relationship between insider ownership and debt and factors affecting insider ownership and debt in Indonesia based on agency theory. The samples used are 37 manufacturing companies for the year 1999, 37 manufacturing companies for the year 2000, and 37 manufacturing companies for the year 2001. Companies listed on Jakarta Stock Exchange (JSX) during 1999-2001. The hypotheses are tested using four models to support the agency theory. The first, debt is regressed on insider ownership. The second, debt is regressed on institutional ownership. The third, debt is regressed on profitability. The fourth, debt is regressed on fixed assets. The results of this study's t-test show that among the insider ownership, institutional ownership, profitability, and fixed assets, only fixed assets that has a significant influence to debt ratio for the regression model. For the result on F-test shows that simultaneously insider ownership, institutional ownership, profitability, and fixed assets don't have a significant influence to debt.