Fatmasari, Devi Sinta (2025) Financial performance: debt policy and dividend policy in moderation of overinvestment / Devi Sinta Fatmasari</p>. Diploma thesis, Universitas Negeri Malang.
Full text not available from this repository.Abstract
p Investment plays a crucial role in company operations. However excessive investment may lead to overinvestment which can harm financial performance. This study aims to analyze the effect of overinvestment on financial performance in Indonesia rsquo s non-cyclical sector and examine whether debt and dividend policies moderate this relationship. The sample consists of 13 non-cyclical companies listed on the Indonesia Stock Exchange (IDX) during 2018 ndash 2023 totaling 78 firm-year observations. Overinvestment is measured using a proxy from Richardson (2006) with modifications by Biddle et al. (2009) and Farooq et al. (2014). The analysis employs t-test and moderated regression analysis (MRA). Findings indicate that overinvestment has a negative effect on financial performance (measured by ROA) supporting the agency theory where high free cash flow can trigger inefficient investment. However neither debt nor dividend policy individually or jointly moderates this negative relationship. This may occur because non-cyclical firms tend to rely on alternative financing sources especially given rising and tightening loan interest rates in 2022. Moreover dividend policy is often used to retain investors rather than control overinvestment. Limitations include the focus solely on overinvestment without considering underinvestment insignificant moderation effects and the use of only two control variables that are not statistically significant. This study has implications by encouraging managers to consider other governance mechanisms such as institutional ownership in addressing overinvestment and improving financial performance. /p
| Item Type: | Thesis (Diploma) |
|---|---|
| Divisions: | Fakultas Ekonomi dan Bisnis (FEB) > Departemen Akuntansi (AKU) > S1 Akuntansi |
| Depositing User: | library UM |
| Date Deposited: | 18 Sep 2025 04:29 |
| Last Modified: | 09 Sep 2025 03:00 |
| URI: | http://repository.um.ac.id/id/eprint/424522 |
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