The Effect of Capital Structure and Company Growth on the Value of Infrastructure Sectors in the IDX

Abstract

The Indonesian government is aware of the importance of improving the condition of the infrastructure so that the investment and business climate becomes more attractive. This government effort has created fierce competition among infrastructure companies. Industry competitors are increasingly improving to achieve company's goals, namely good corporate value. Furthermore, growth in this context isdefined as the growth of a company where the total of the past sales reflects future profitability and future growth. This study aims to analyze the effect of capital structure on company value partially, the effect of growth on company value partially, and the effect of capital structure and growth on company value simultaneously. The subjects of this study include financial reports of infrastructure, energy, toll road, airport, port, telecommunications, non-building construction and transportation sectors listed on the Indonesia Stock Exchange on the IDX in 2017. The sampling method used is purposive sampling, with the criteria for the companies in this study. A quantitative analysis method using a multiple linear regression analysis is utilized, followed by determination analysis (R Square), partial hypothesis testing (t-test) and simultaneous (F-test) with alpha 5 percent (0,05). Prior to further analysis, data quality and classical assumption tests are carried out. An analytical tool using SPSS version 23.0 for Windows is also used. The result of this research shows that capital structure has a partial influence on company value, growth has a partial influence on company value, and capital structure and growth simultaneously influence company value. Keywords—capital structure, growth, company value, infrastructure, IDX