The Effect of Leverage, Firm Size, Profitability, and Liquidity on Hedging Decisions

Heri Purwanto; Rosyid Nur Anggara Putra

doi:10.14421/jai.2022.1.1.033-043

Authors

Heri Purwanto Department of Islamic Accounting, Faculty of Islamic Economics and Business, UIN Sunan Kalijaga Yogyakarta
Rosyid Nur Anggara Putra Faculty of Islamic Economics and Business, State Islamic University (UIN) Sunan Kalijaga, Yogyakarta http://orcid.org/0000-0001-9066-238X

DOI:

https://doi.org/10.14421/jai.2022.1.1.033-043

Abstract

Purpose: This study aims to determine the effect of leverage, firm size, profitability, and liquidity on hedging decisions of manufacturing companies listed on the Indonesia Stock Exchange (IDX)

Methodology: The sample in this study are 22 manufacturing companies listed on the IDX from 2014 to 2019. This research uses the logistic regression analysis technique.

Findings: The results show that the variable leverage, firm size, and profitability have a positive effect and are significant on hedging decisions, while the liquidity variable has no effect on hedging decisions.

Novelty: This study continues previous research by using a different population, adding independent variables, and using the manufacturing sector.

Keywords: Leverage, Firm Size, Profitability, Liquidity, Hedging