Moderating Effects Of Corporate Governance Mechanism On The Relation Between Capital Structure And Firm Performance

Abstract

Examining how corporate governance affects the relationship between capital structure and company performance is the goal of this research. This research makes use of secondary data in the shape of financial reports from 30 organizations from 2016-2021 for its calculations. Using moderated regression analysis, data were examined. The findings show that choices about capital structure funding affect financial performance favorably. This only pertains to recent loans, though. Otherwise, long-term debt has a negative and negligible influence on both profit on assets and profit on stock. These findings are congruent with the pecking order theory, which states that based on real facts, corporate earnings and capital structure have an adversarial connection.