The Impact of Capital Structure on the Profitability Performance of ICT Firms

Information and communication technology (ICT) companies strive for ceaseless innovation to remain competitive while facing the challenge of maximizing firm value (FV) with limited resources, increasing interests shareholders. However, capital structures have a considerable effect on FV, literature still disagrees optimum structure in specific industries countries. Therefore, this study evaluates FV ICT terms profitability efficiency using data envelopment analysis. In addition, applies Tobit regression Kruskal-Wallis one-way ANOVA identify impact leverage, liquidity, size, which are major factors influencing FV. The analysis yields three main results. First, industry, small medium tend better than other sizes. Second, only manufacturing companies’ is positively impacted by current ratio. Third, mid-sized service debt-equity results policy practical implications improving companies.