AN ESTIMATION OF SIGNIFICANT CORPORATE FINANCIAL CHOICES AND THEIR ANTECEDENTS APPLYING BAYESIAN INFORMATION CRITERIA: A CASE OF INDONESIA

Abstract

The existing literature is contradictory regarding the primary determinants of corporate financial decisions in developing nations. This study utilized Bayesian Information Criteria (BIC) to address firms' capital structure determinants and outfitting issues. To report the variety of capital structure decisions made by Indonesian listed firms, we analyzed literature from developed and developing nations, such as China, the United States, Pakistan, etc. Profitability, tangibility, cash on hand, liquidity, uniqueness, asset utility, size, and industry leverage emerged as more reliable capital structure determinants. In addition, these predictors demonstrated the capital structure of the selected firms based on their size, ownership concentration, maturity, and growth rate with reliability. In addition, the current study is a valuable addition to the existing corpus of literature on corporate financial choices in developing nations because it presents eight fundamental predictors of capital structure in terms of corporate financial choices.