Can the Post-crisis Reform Policies Change Corporate Financing in Indonesia? : Estimating Distinct Effects of Ethnic and Social Factors

アジア キキ ゼンゴ ノ インドネシア ジョウジョウ キギョウ ノ シホン コウゾウ : ケイザイ カイカク ニヨル シャカイテキ ネットワーク ノ エイキョウリョク ノ ヘンカ

Capital Structure

Ownership Structure

Indonesia

G34

G38

This study investigates the factors determining the debt-ratios of Indonesian listed companies after the implementation of reform policies subsequent to the Asian crisis. The estimation analysis of the panel data for the period 1994-2005 reveals several factors that determined substantive change in the financing activities of these listed companies. The capital structure of Indonesian companies had been characterized by excessive leveraging by business conglomerates as well as specific social and political elements before the Asian financial crisis; however, these influences were not found in the estimation results for the years after the crisis. This significant change is considered to be a consequence of financial and corporate reforms.However, the estimation results show that other policy tasks remain. First, insufficient collateral may become a serious impediment to financial activities. Second, only companies with sufficient collateral can borrow long-term. In order to tap long-term funding, the core company in each business group function as a conduit for such borrowing.