Profitability and Leverage: Different Effects of Negative Profits?

Iswadi Bensaadi, Adnan Adnan, Wahyuddin Albra
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Abstract

Objective – This study aims to examine the effect of profitability on leverage in firms with negative profits and the sensitivity of the COVID-19 pandemic in explaining the effect of profitability on leverage.Design/Methodology –This study uses unbalanced panel data for 660 firm-year observations over 4 (four) years from 2018 to 2021 on non-financial service firms. Two-stage least square regression was utilized to examine the effect of profitability on leverage.Results –Consistent with several previous studies, this study indicates that profitability negatively affects leverage and has similar results in firms with negative profits. Another finding is that the COVID-19 pandemic is not sensitive to explaining the effect of profitability on leverage. Both the pre-COVID-19 pandemic and during the COVID-19 pandemic, profitability has a similar effect on leverage.Research limitations/implications –This study is conducted over a short period, only four years. The study provides a new perspective on the effect of profitability on leverage in companies with negative profits and the pecking order theory in explaining the relationship between profitability and leverage in the Indonesian context.Novelty/Originality –This study examines the effect of profitability on leverage in firms with negative and positive profits using a two-stage least square (2SLS) in the Indonesian context.
盈利能力与杠杆:负利润的不同影响?
目的-本研究旨在检验负利润公司的盈利能力对杠杆的影响,以及COVID-19大流行在解释盈利能力对杠杆的影响时的敏感性。设计/方法-本研究使用非金融服务公司2018年至2021年4(4)年间660家公司年度观察的不平衡面板数据。利用两阶段最小二乘回归来检验盈利能力对杠杆率的影响。结果-与之前的几项研究一致,本研究表明盈利能力对杠杆产生负面影响,并且在负利润的公司中也有类似的结果。另一个发现是,新冠疫情对解释盈利能力对杠杆率的影响并不敏感。无论是在COVID-19大流行之前还是在COVID-19大流行期间,盈利能力都对杠杆产生了类似的影响。研究局限性/启示-本研究进行的时间很短,只有四年。本研究为负利润公司的盈利能力对杠杆的影响提供了新的视角,并为解释印尼背景下盈利能力与杠杆之间的关系提供了啄食顺序理论。新颖性/原创性——本研究在印度尼西亚的背景下,使用两阶段最小二乘法(2SLS)检验了盈利能力对负利润和正利润公司的杠杆率的影响。
本文章由计算机程序翻译,如有差异,请以英文原文为准。
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