Determinants of Capital Structure in Technology Companies Listed on the Indonesia Stock Exchange

Abstract

This study examines the associations between business risk, asset structure, institutional ownership, and sales growth with the capital structure of technology companies listed on the Indonesia Stock Exchange. This problem is relevant because Indonesian technology issuers combine rapid expansion, intangible resources, and uneven operating income, while sector-specific evidence remains limited. This explanatory quantitative study uses annual financial statement data for 2021–2025. Purposive sampling produced 15 companies and 75 firm-year observations for the study. After natural logarithm transformation and case-wise outlier treatment, multiple linear regression was estimated using 55 observations from 11 companies. Capital structure is measured using the Debt-to-Equity Ratio (DER). Business risk is negatively and significantly associated with capital structure (B=−0.806; p<0.001), as are asset structure (B=−0.238; p=0.034) and sales growth (B=−1.439; p=0.006). Institutional ownership is positively and significantly associated with the capital structure (B=2.626; p<0.001). The model is jointly significant (F=26.534; p<0.001) and has an adjusted R² of 0.654. This study extends prior sector-mixed evidence by examining four determinants jointly in recent Indonesian technology-sector data, documenting the sample-reduction process, and comparing competing theoretical explanations. The coefficients are interpreted as sample-specific associations from Pooled Ordinary Least Squares rather than as causal effects or universal financing rules.

Keywords

capital structure business risk asset structure institutional ownership sales growth