DETERMINANT OF THE SPEED OF ADJUSTMENT OF THE CAPITAL STRUCTURE OF ISSUERS IN THE BANKING SECTOR
This paper intends to analyze and test the Speed of Adjustment (SoA) of the actual towards optimal capital structure in banks in Indonesia over the year 2013-2022 which are listed on the Indonesia Stock Exchange, focused on how distance affected Speed of Adjustment (SoA). In order to assess the impacts of distance on Speed of Adjustment (SoA) and used panel data estimators as our approach for this study. Data for the years 2013 through 2022 were gathered from 5 companies using their annual financial reports. The result in this research show that profitability, liquidity, and tangibility have significant implications on capital structure of banking sub-sector companies. Meanwhile, firm size, growth, and risk do not have a significant effect on the capital structure of banking sub-sector companies. For the period of 2013 to 2022, the speed of adjustment value for companies in the banking sector listed on the IDX is 76.2%, meaning that it will take 1.3 years for banking sector companies in Indonesia to change their capital structure to optimal. The analysis's findings indicate that distance significantly affects the speed of adjustment, with a higher distance indicating a quicker rate of capital structure adjustment by the company.
Adjustment Speed, Capital Structure, Distance.