The Influence of Capital Structure Determinant Variables Toward Corporate Debt Ratio Which Mediated by Agency Cost

摘要

This research purposes to explore the mediating effect of agency cost towards the capital structure differences between the industrial companies of the manufacturing sector and non-manufacturing sector which listed in the Indonesian Stock Exchange. This research employed quantitative approach by applying path analysis to analyze the mediating effect of agency cost toward the influences of capital structure determinant variables toward debt ratio. These findings revealed that growth opportunity and insider ownership significantly affected agency cost. The agency cost significant positively effected debt ratio. Debt ratio in both sectors have no significant differences. The agency cost in both sectors mediated the effect of capital structure determinant variables on corporate debt ratio. Finally, the mediating effect of agency cost on debt ratio in industrial companies of the manufacturing sector was higher than the companies of the non-manufacturing sector.