Determinant Analysis of Company Debt Policy with Vector Error Correction Model Approach

Purpose- This study uses a VECM model that aims to see the short-run and long-term effects of managerial ownership, sales growth, free cash flow, asset structure against debt policy. Vector Error Correction Model (VECM) is can be used for time series data not stationary but has cointegration relationship where in included exogenous variables as additional regressors.
 Research Method- The sample this research quantitative with purposive sampling technique. Based on criteria, number samples collected 32 period 2013-2021.The analysis techniques use Correlation analysis, several stages researchers must go through before determining right model, namely stationarity test, optimal lag length co-integration VAR stability granger causality VAR/VECM empirical Impulse Response Function Variance Decomposition analysis.
 Findings- results show short term only growth have significant influence Meanwhile, policy, while ownership an insignificant effect policy.
 Implication- For company should reduce proportion funding from implementation its operations so financial distress, because corporate causes distress agency costs greater than tax savings interest expense, result which very vulnerable economic turmoil. creditors who provide sources funding, pay more attention aspects company's collateral debt, usually loan funds high-risk projects. investors take deeper considerations invest companies large flow tend good future.