ABSTRACT
Decision in investment is critical for company’s performance, competitiveness, profitability and their survival. This study was aimed to demonstrate empirically how manufacturing company’s leverage and growth affect their investment decision in Indonesian context. This study utilized annual financial statements of companies in the manufacturing sector listed on the Indonesia Stock Exchange (BEI) within the period of 2007 to 2016. The results of analysis showed that leverage has a control function on management. Company growth has positive effect on the investment. Meanwhile, free Cash Flow has negative impact on investment that can be proven by their cash holding behaviour. In addition, this study demonstrated that the companies’ growth rate does not strengthen nor weaken the effect of leverage on the investment decisions of the manufacturing companies in Indonesia. The fact is assumed to be happened due to the financial constraint issues when the company intended to perform external financing for their investment in Indonesia.
