This research explores the relationship between institutional and private ownership and the debt ratio in companies listed on the stock exchange, utilizing panel data from 167 companies over the period 2018 to 2022. The study is ex-post facto and descriptive, employing the Ordinary Least Squares (OLS) regression method to analyze the impact of ownership structures on corporate leverage. The findings reveal that institutional ownership is negatively correlated with the debt ratio, suggesting that institutional investors prefer lower leverage, whereas private ownership is positively correlated with higher debt ratios, indicating a greater tolerance for leverage among private investors. Firm size also shows a significant positive relationship with the debt ratio, implying that larger firms tend to have higher levels of debt. The research contributes to the understanding of how different ownership types influence corporate financial policies, providing valuable insights for corporate managers and investors. The study's practical implications suggest that companies with significant institutional ownership should focus on maintaining conservative leverage, while those with higher private ownership might strategically utilize debt to finance growth, considering the positive correlation between private ownership and debt ratios. Larger firms are advised to leverage their size advantage in accessing favorable debt terms while maintaining an optimal capital structure.
