S. Martono, Arief Yulianto, Angga Pandu Wijaya



Usage of Debt and The Probability of Increased Profits

pdf PDF


The purpose of this paper is to investigate how relationship usage of debt and probability of Increased Profit in the context a manufacturing industry in Indonesia as Emerging Market. The Study utilized a cross sectional design and investigated the relationship performance on a sample of 611 unit of observation from the Manufacturing sector in Indonesia period 2009 – 2018. Data analysis uses logistic regression. Asymmetry information between debt holders and shareholders resulted in the use debt in some manufacturing companies with heterogeneous sub-sectors for a significant investment. Consequently, companies in different manufacturing sub-sectors need to consider the relationship between the level of debt and information asymmetry based on their characteristics. The predictions has been criticized inability to adjusted with market timing of debt or equity. This is an avenue for implication research. The study to extend of relationship usage short and profitability through logistic regression and marginal profitability. The study implies to manager to create to handle debt is optimal for investment, therefore agency problem will decrease


Leverage, Profitability, Agency Problem, Asymmetric Information, Emerging Market, Logit Regression


Cite this paper

S. Martono, Arief Yulianto, Angga Pandu Wijaya. (2021) Usage of Debt and The Probability of Increased Profits. International Journal of Economics and Management Systems, 6, 453-458


Copyright © 2021 Author(s) retain the copyright of this article.
This article is published under the terms of the Creative Commons Attribution License 4.0