Capital Structure Determinants of Construction Firms: Does Firm Size Moderate the Results?

Firstly, this paper highlights how the firm-specific factors and external macroeconomic variables affect the capital structure. Secondly, it highlights the effect of firm-specific factors and external macroeconomic variables on capital structure with the firm size as the moderating variable. The population of this study is construction companies listed on the Indonesia Stock Exchange. By employing the purposive sampling method, we used 30 data panels as the research sample covering the period from 2009 to 2014. To analyze the data, we used Moderated Regression Analysis. The research results showed that the factors which significantly determine the capital structure are profitability, liquidity, inflation, and GDP. Meanwhile, tangibility does not affect the capital structure. When the firm size is included as the moderating variable, the tangibility factor, profitability, inflation, and GDP significantly affect the capital structure. Meanwhile, the liquidity factor does not affect the capital structure.