Last modified: 2017-06-02
Abstract
The purpose of this research is to examine the factors affected corporate investment. The factors influence the corporate investment is accounting conservatism, leverage, firm size, and liquidity. The sample of this research comprises 173 firm observation in manufacturing firms listed on Indonesian Stock Exchange (IDX) in the period of 2013 – 2015. The independent variable consist of accounting conservatism, leverage, firm size, and liquidity. In further analysis, the author performs multiple regression analysis.
Providing some support for agency theory, it is found that liquidity is negative effect on corporate investment. Further, this study provides evidence that the accounting conservatism and leverage have negative effect on corporate investment. But the firm size doesn’t have effect on corporate investment.
This research contributes to the corporate investment literature where in Indonesia such research has not been widely practiced. For investors or principal, this research can be useful to know that there is a conflict between managers (agent) and investors (principal) in terms of determining the firm's investment activity on fixed assets