Title: Leverage, Firm Value and Competitive Strategy: Evidence from Indonesia
Abstract: We study the agency theory by re-examining the effect of financial leverage on firm value. Moreover, we introduce a contingency variable: firm competitive strategy. To do so, we study non-financial firms listed on the Indonesia Stock Exchange from 2007 through 2013, resulting in 2,438 observations. Using the panel data technique, after controlling for firm-specific characteristics and industry differences, we find that leverage has a positive effect on firm value. Going deeper, we find that this effect is stronger for firms that apply a cost leadership strategy, differentiation strategy, or focused strategy.
Publication Year: 2017
Publication Date: 2017-10-09
Language: en
Type: article
Indexed In: ['crossref']
Access and Citation
Cited By Count: 1
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