TRADE OFF THEORY DAN KECEPATAN PENYESUAIAN KE ARAH TARGET LEVERAGE (SUATU TINJAUAN TEORITIS DAN EMPIRIS)

Authors

  • Dwi Cahyaningdyah Universitas Airlangga Surabaya Universitas Negeri Semarang

DOI:

https://doi.org/10.26740/bisma.v9n2.p69-79

Keywords:

trade off theory, speed of adjustment, partial adjustment model, dynamic trade off model

Abstract

Trade off theory of capital structure predicts that firms have optimal target leverage. However, empirical studies provide evidence that firms capital structure  often deviate from the target because of economic shocks. Therefore firm should make adjustment toward target leverage to maintain optimal trade off between cost and benefit of their financing decision.

Understanding of adjustment behavior of the firm is key factor to comprehend firms capital structure dynamic. Nevertheless, asan important issue in corporate finance, speed of adjustment estimation still have several problems caused bias and spurious result. Recent studies identified several econometric problems of the model used by previous studies. This paper revisited these problems and provide several alternative solutions from recent studies. 

Author Biography

Dwi Cahyaningdyah, Universitas Airlangga Surabaya Universitas Negeri Semarang

mahasiswa pada program doktor ilmu manajemen Universitas Airlangga Surabaya

dosen pada Fakultas Ekonomi Universitas Negeri Semarang

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Published

2018-04-06

How to Cite

Cahyaningdyah, D. (2018). TRADE OFF THEORY DAN KECEPATAN PENYESUAIAN KE ARAH TARGET LEVERAGE (SUATU TINJAUAN TEORITIS DAN EMPIRIS). BISMA (Bisnis Dan Manajemen), 9(2), 69–79. https://doi.org/10.26740/bisma.v9n2.p69-79

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