Effect of Political Risk on Profitability Mediated by Capital Structure in Real Estate Development Companies of ASEAN-5

Christovel Khosuma(1*), Hatane Semuel(2), Sautma Basana(3),


(1) 
(2) 
(3) 
(*) Corresponding Author

Abstract


The aim of this study is to investigate the effect of political risk on profitability with capital structure as mediator in real estate development companies of ASEAN-5 that is 268 companies total in population. The type of research is quantitative and the datas are collected from companies’ financial statements period 2012-2016. The analysis is conducted on partial least square. The result of partial least square shows that capital structure is not significant as mediator. However, political risk to profitability is significant. This proves that politics also determine the survivability of real estate development companies in the scope of finance. Afterwards, the outcomes may guide investors while considerating to invest in own country or in other ASEAN-5 countries which have different characteristics including political risk.

 

Keywords: Political risk, capital structure, profitability, real estate development companies, ASEAN-5, 2012-2016.


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