Profitability, Leverage, and Liquidity on Foreign Ownership in Non-Financial Sector Companies

Suhartin Mohamad Syarif

doi:10.21111/at.v11i2.15672

Authors

Suhartin Mohamad Syarif Universitas Flores

DOI:

https://doi.org/10.21111/at.v11i2.15672

Keywords:

Profitability, Leverage, Liquidity, Foreign Ownership

Abstract

This study aims to analyze the effect of profitability, leverage, and liquidity on foreign ownership in non-financial companies in Indonesia. The research sample consists of 30 companies listed on the Indonesia Stock Exchange (IDX) during the period 2020–2024. This study uses secondary data from company financial reports and official IDX information, and applies panel data regression with a fixed effect model to analyze the effect of independent variables on foreign ownership. The results show that profitability has a positive and significant effect, while leverage and liquidity do not have a significant effect on foreign ownership. These findings indicate that foreign investors prioritize a company's profit performance as the basis for their investment decisions. This study has implications for company management to focus on improving profitability, as well as for regulators to encourage transparency and good governance. The limitations of this study include the limited sample coverage in the non-financial sector and other variables that have not been analyzed, so further research is recommended to expand the variables and sectors to obtain a more comprehensive picture.

References

Aznedra, A., & Putra, R. E. (2020). Analisis Laporan Keuangan Untuk Menilai Kinerja Perusahaan Menggunakan Analisis Rasio Profitabilitas Pada PT Putra Kundur Transportasi Batam. Measurement Jurnal Akuntansi, 14(1), 55–62.

Cudivia, V. G., Salim, S., & Daryatno, A. B. (2025). Faktor-Faktor Yang Mempengaruhi Capital Structure Pada Consumer Non-Cyclicals Dan Cyclicals. Jurnal Paradigma Akuntansi, 7(3), 1014–1024. https://doi.org/https://doi.org/10.24912/jpa.v7i3.34318

Fadila, S. N. (2024). Pertumbuhan Ekonomi Indonesia Diproyeksikan 5,15% di 2025. Kontan: Business News & Insight.

Gupta, S., Yadav, S. S., & Jain, P. K. (2024). Impact of foreign ownership on leverage: A study of Indian firms. Global Business Review, 25(1), 51–67. https://doi.org/https://doi.org/10.1177/0972150920927360

Handayani, W., Fadhillah, N. H. K., & Fadhilah, S. H. (2022). Effect of Asset Structure , Company Size , Liquidity , Profitability , and Sales Growth on Capital Structure. Jurnal Bisnisman, 4(1), 80–92. https://doi.org/https://doi.org/10.52005/bisnisman.v4i1.120

Harymawan, I., Arianto, A., & Paramitasari, Y. I. (2020). Industry growth, ownership structure, and capital structure in Indonesia. In Advances in business, management and entrepreneurship (pp. 304–309). CRC Press.

Ilham, M., Muchran, M., & Nasrullah, N. (2025). Analisis Rasio Likuiditas Dan Solvabilitas Dalam Mengukur Kemampuan Membayar Kewajiban Pada PT Daya Mitra Telekomunikasi, Tbk. Jurnal Ekuilnomi, 7(2), 310–319.

Maulana, Y., & Aziz, M. N. (2024). Pengaruh Profitabilitas, Likuiditas, Dan Kepemilikan Institusional Terhadap Struktur Modal. Bisnis-Net Jurnal Ekonomi Dan Bisnis, 7(1), 310–320. https://doi.org/https://doi.org/10.46576/bn.v7i1.4408

Muñoz Mendoza, J. A., Delgado Fuentealba, C. L., Veloso Ramos, C. L., Sepúlveda Yelpo, S. M., Cornejo Saavedra, E. E., & Erices Olivera, D. A. (2023). Capital structure adjustment in Latin American firms: An empirical test based on the Error Correction Model. Estudios Gerenciales, 39(166), 50–66.

Nguyen, T., Bai, M., Hou, G., & Vu, M.-C. (2020). State ownership and adjustment speed toward target leverage: Evidence from a transitional economy. Research in International Business and Finance, 53, 101226.

Nguyen, V. D., & Duong, Q. N. (2022). The impact of foreign ownership on capital structure: Empirical evidence from listed firms in Vietnam. The Journal of Asian Finance, Economics and Business, 9(2), 363–370.

Nirawati, L., Samsudin, A., Stifanie, A., Setianingrum, M. D., Syahputra, M. R., Khrisnawati, N. N., & Saputri, Y. A. (2022). Profitabilitas dalam perusahaan. Jurnal Manajemen Dan Bisnis, 5(1), 60–68.

Okeke, O. C., Abdoush, T., Jemutu, A. S., & Okere, W. (2025). Determinants of leverage in emerging markets and the moderating effect of foreign ownership: Evidence from Nigeria. Global Business Review, 09721509241295526. https://doi.org/https://doi.org/10.1177/09721509241295526

Patiu, L. S. (2025). Capital Structure Determinants in the Food and Beverage Industry in ASEAN: The Moderating Role of Firm Size.

Pohan, D. S. (2025). Pengaruh Kepemilikan Asing dalam Sektor Finansial terhadap Ekonomi Nasional. Circle Archive, 1(7).

Pravitadewi, R. (2021). Pengaruh Profitabilitas, Likuiditas, Kepemilikan Manajerial, dan Ukuran Perusahaan terhadap Struktur Modal pada Perusahaan Manufaktur yang Terdaftar di Bursa Efek Indonesia. Universitas Hayam Wuruk Perbanas Surabaya.

Purwowidhu, C. (2024). Ekonomi Indonesia: Tumbuh Tangguh di 2023, Bagaimana di 2024. Media Keuangan. Retrieved February, 23, 9–19.

Ramadani, A. G., Batam, U. I., Batam, U. I., Safitri, D., & Batam, U. I. (2025). Implications Of The Effect Of Profitability And Liquidity On Capital Structure In Mining Companies In Indonesia. 12. https://doi.org/https://doi.org/10.30587/jurnalmanajerial.v12i01.8503

Subramanyam, K. R. (2020). Financial statement analysis. In McGraw-Hill Education.

Tran, Q. T. (2022). Foreign ownership and cost of debt financing: evidence from an emerging market. International Journal of Emerging Markets, 17(9), 2278–2289.

Wahyu, J., Cahjono, M. P., & Satyawati, E. (2022). Pengaruh Profitabilitas, Non-Debt Tax Shield Dan Ukuran Perusahaan Terhadap Struktur Modal Pada Sub Sektor Makanan Dan Minuman Yang Terdaftar Di Bursa Efek Indonesia. Bussman Journal: Indonesian Journal of Business and Management, 2(2), 417–428.