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Financing decisions : is the quality of information still relevant to be considered?

Information asymmetry makes it difficult for company management to make decisions regarding funding sources. This study aims to investigate and explain the behaviour of company management when faced with asymmetric information problems. Data on 459 companies in Indonesia during the 2005–2019 perio...

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Main Author: Arif Budi Satrio,
Format: Article
Language:English
Published: Penerbit Universiti Kebangsaan Malaysia 2022
Online Access:http://journalarticle.ukm.my/21069/1/49502-200163-2-PB.pdf
http://journalarticle.ukm.my/21069/
https://ejournal.ukm.my/pengurusan/issue/view/1569
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spelling my-ukm.journal.210692023-02-09T05:21:13Z http://journalarticle.ukm.my/21069/ Financing decisions : is the quality of information still relevant to be considered? Arif Budi Satrio, Information asymmetry makes it difficult for company management to make decisions regarding funding sources. This study aims to investigate and explain the behaviour of company management when faced with asymmetric information problems. Data on 459 companies in Indonesia during the 2005–2019 period are surveyed in an attempt to provide the latest evidence regarding this issue. Investigations using the fixed-effect model approach and dynamic two-step system generalised method of moments are carried out using preliminary and robustness tests. The results show that in addition to company-specific factors, the problem of asymmetric information is an important factor considered by management in determining funding sources. The worsening information gap has led companies to increasingly use external funding from borrowing instead of adding additional funding sources from equity issuance (confirming the pecking order theory). Robust results in this study will be of use to regulators and enrich the literature related to corporate funding decisions in developing countries. Penerbit Universiti Kebangsaan Malaysia 2022 Article PeerReviewed application/pdf en http://journalarticle.ukm.my/21069/1/49502-200163-2-PB.pdf Arif Budi Satrio, (2022) Financing decisions : is the quality of information still relevant to be considered? Jurnal Pengurusan, 66 . pp. 41-52. ISSN 0127-2713 https://ejournal.ukm.my/pengurusan/issue/view/1569
institution Universiti Kebangsaan Malaysia
building Tun Sri Lanang Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Kebangsaan Malaysia
content_source UKM Journal Article Repository
url_provider http://journalarticle.ukm.my/
language English
description Information asymmetry makes it difficult for company management to make decisions regarding funding sources. This study aims to investigate and explain the behaviour of company management when faced with asymmetric information problems. Data on 459 companies in Indonesia during the 2005–2019 period are surveyed in an attempt to provide the latest evidence regarding this issue. Investigations using the fixed-effect model approach and dynamic two-step system generalised method of moments are carried out using preliminary and robustness tests. The results show that in addition to company-specific factors, the problem of asymmetric information is an important factor considered by management in determining funding sources. The worsening information gap has led companies to increasingly use external funding from borrowing instead of adding additional funding sources from equity issuance (confirming the pecking order theory). Robust results in this study will be of use to regulators and enrich the literature related to corporate funding decisions in developing countries.
format Article
author Arif Budi Satrio,
spellingShingle Arif Budi Satrio,
Financing decisions : is the quality of information still relevant to be considered?
author_facet Arif Budi Satrio,
author_sort Arif Budi Satrio,
title Financing decisions : is the quality of information still relevant to be considered?
title_short Financing decisions : is the quality of information still relevant to be considered?
title_full Financing decisions : is the quality of information still relevant to be considered?
title_fullStr Financing decisions : is the quality of information still relevant to be considered?
title_full_unstemmed Financing decisions : is the quality of information still relevant to be considered?
title_sort financing decisions : is the quality of information still relevant to be considered?
publisher Penerbit Universiti Kebangsaan Malaysia
publishDate 2022
url http://journalarticle.ukm.my/21069/1/49502-200163-2-PB.pdf
http://journalarticle.ukm.my/21069/
https://ejournal.ukm.my/pengurusan/issue/view/1569
_version_ 1758579329433862144
score 13.211869

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