The impact of managerial ownership, instutusional ownership, proportion of independent commisioner, intellectual capital on financial distress (original) (raw)
Related papers
The Impact of Ownership Structure on the Indicator of Financial Distress In Indonesian Companies
Jurnal Akuntansi dan Bisnis, 2020
The increase in bankruptcy cases and delaying debt repayment by 16.43 percent during the year of 2015 to 2017 reinforced the importance of having good corporate governance to avoid this issue. This study aims to delve into the effect of ownership structures on the risk of financial distress in 421 companies (except financial institutions) in the period from 2012 to 2017. The types of ownership that are being examined are Institutional Ownership, Insider Ownership, Government Ownership, and Foreign Ownership. This study uses OLS Driscoll-Kraay standard error panel data regression. The results of this study shows that Institutional Ownership has a positive relationship to financial distress which is caused by the tendency of Institutional investors to conduct passive monitoring. Inversely, foreign ownership and government ownership have been proven to have a negative relationship with the risk of financial distress. This was caused by the capability of the foreign investors to do better-monitoring activities and maintain the ultimate shareholder's company in their home country. Furthermore, the presence of merah putih shares allows the government to have absolute voting power. This research intends to provide new business perspectives to companies, investors, regulators, creditors, and other stakeholders for economic decision-making purposes.
The Determinants of Financial Distress: An Empirical Investigation of Indonesian Firms
2020
This study aims to investigate the determinants of financial distress (i.e., financial indicators, firm size, institutional and managerial ownership). The sample of this study includes 250 firms registered in Indonesia Stock Exchange (IDX) of the period 2014 – 2017. By using logistic regression analysis, the results show that 1) leverage has a positive effect on financial distress; 2) profitability, operating capacity, and firm size have a negative effect on financial distress; and 3) liquidity, sales growth, and institutional and managerial ownership have no effect on financial distress.
IEOM Singapore, Proceeding, 2021
Financial distress is a state under which the organisation's financial position is unstable yet has not gone bankrupt. Many manufacturing companies in Indonesia experienced corporate financial instability, revenues from manufacturing companies continued to fluctuate, and some companies experienced negative operating profits. It creates a significant effect on financial distress, where it is not just the business that will incur losses but also the stakeholders. Thus, the present study attempts to analyse the factors (i.e., liquidity, profitability, leverage, company size, and interest rates) that affect financial distress in Jakarta Stock Exchange-listed companies, Indonesia. This study uses secondary data collected from two sources, i.e., the Central Bureau of Statistic and Financial Services Authority website for 2014 to 2020. The data analysed using multiple linear regression by assisting with econometric software, namely Eviews-10. This study found that liquidity, profitability, leverage, and interest rate significantly affect financial distress. Besides that, firm size does not affect financial distress. The results showed that, from the independent variables studied, it was proven that the liquidity variable and the interest rate had a negative effect on financial distress. Meanwhile, the variables of profitability and leverage have a positive effect on financial distress. It means that company leaders must consider liquidity, profitability, leverage, company size and interest rates to avoid financial distress. However, it is also necessary to pay attention to the Economic Stimulus, which can moderate these variables' relationships.
Media Ekonomi dan Manajemen
Financial distress is a condition where a company is unable to meet its obligations when they directed to bankruptcy. The purpose of this study was to analyze influence of corporate governance, profitability, liquidity, leverage and earning growth on financial distress. Research sample data used in this study were manufacturing companies listed on the main board and development board on the Indonesia Stock Exchange in 2016-2020. Logistic regression analysis had been applied to analyze data of study. The results show that the factors that influence Financial Distress in manufacturing companies on the main board and development board were different. For manufacturing companies on main board, influencing factors of financial distress were independent audit committee, liquidity, leverage, and earning growth. Meanwhile, board size, profitability, liquidity, leverage and earning growth were influencing factors of financial distress for manufacturing companies on development board.
Corporate governance on financial distress: Evidence from Indonesia
Management Science Letters, 2021
The main objective of this paper is to explore the most significant determinants of financial distress of manufacturing companies in Indonesia and to provide explanations on this issue by using multiple regression models. With Modigliani and Miller’s and Trade-off theories were reviewed to formulate a testable proposition on the determinants of financial distress of manufacturing companies in Indonesia. Multiple regression models were used as a statistical tool to investigate the most significant profitability determinants of manufacturing companies in Indonesia. The Lisrel software was used to analyze 300 manufacturing companies listed on the Indonesia Stock Exchange. It was found that institutional ownership, firm size, profitability, and board independence as variables had a positive relationship in an effort to avoid financial distress. Meanwhile, the board size variable had an insignificant positive relationship. The findings are consistent with the pecking order and financial ...
Financial Distress Model Prediction for Indonesian Companies
2016
This study aims to find appropriate financial distress prediction model for Indonesia company with the added variable of corporate governance. Corporate governance indicators ownership structure is expected to represent the typical leadership style of Indonesia. The research is conducted on 42 companies, which consistently include in the Kompas-100 Index in Indonesia Stock Exchange within 3 (three) years (2011-2013) time period. The estimation model being used is panel data regression, with Fixed Effect Method approach. Based on the results of the data analysis and discussion, it is concluded that Managerial Ownership has no significant impact on the financial distress. However, Institutional Ownership has significant impact on the financial distress. Liquidity as a moderating variable has no significant influence for towards the ownership structure to financial distress.
International Journal of Financial Research, 2020
This study aims to examine the effect of four variables, which include independent commissioners, audit committees, institutional ownership and managerial ownership as a proxy for the corporate governance mechanisms on financial distress. This was carried out on the manufacturing companies listed on the Indonesia Stock Exchange (IDX) in 2016-2018. The samples were selected using the purposive sampling method and 224 data were obtained. The hypothesis in this study was tested using logistic regression. The results showed that independent commissioners have a negative influence on financial distress, while the audit committee, institutional ownership and managerial ownership have no effect. This implies that an independent commissioner functions as an effective supervisory mechanism to prevent a company from experiencing financial distress. Furthermore, two control variables used in this study, namely leverage and profitability, were able to produce results as predicted. It was discov...
An Empirical Investigation into Board Effectiveness and Financial Distress The Case of Indonesia
International Journal of Auditing and Accounting Studies, 2019
This study analyses the effectiveness of thetwo board system mechanism implemented in Indonesia in condition of financial distress. The governance system of Indonesian companies with family business characteristics separates management functions, namely the board of directors (BD) and supervisory functions run by the board of commissioners. Since the members of the board of commissioners are partly not independent of the board of directors, the role of independent commissioners (IND) is critical important, especially in conditions of financial distress. The sample of this research is companies listed in Indonesia Stock Exchange in the period of 2014-2017. The logistic regression model was employed for 1,168 observations to analyze the influence of the BD and IND on financial distress. The result showed that the BD has a significant effect in reducing the likelihood of financial distress. Although IND have shown independency, it has not been significant in reducing the likelihood of financial distress.
Analysis of financial distress in banking companies listed on the indonesian stock exchange
AKUNTABEL
Financial distress is a condition when a company experiences an inability to fulfill all financial obligations in the long term. This study analyzes capital structure, female directors, liquidity, and profitability predicting the possibility of financial companies in the 2018-2020 period experiencing financial distress. The research population is financial companies operating on the IDX in the 2018-2020 period with as many as 105 companies. Determination of the sample used is purposive sampling method with the results of 46 companies. The research analysis technique is panel data regression with the best fixed effect model. Based on the analysis results show that the capital structure has a significant effect on financial distress where the higher the company's leverage will cause financial distress. While female director, liquidity, and profitability have no significant effect on the company's financial distress. It is expected that the company will always pay attention to the level of use of leverage so that it can maintain the optimal condition of the company's cash. For future research, it is possible to add variables such as inflation rate, interest rate, tax, firm size, growth sales which can affect financial distress.
Financial Distress In Indonesia: Viewed From Governance Structure
Jurnal Riset Akuntansi dan Keuangan, 2020
This study aims to determine the effect of managerial ownership, institutional ownership, the proportion of independent commissioners, the size of the audit committee, the independence of the audit committee, and the number of audit committee meetings on financial distress. There were 51 samples from 17 state-owned companies listed on the Indonesia Stock Exchange in the 2015-2017 period. The data used are secondary data with data analysis techniques using multiple linear regression. The results showed that managerial ownership, audit committee size, and audit committee independence did not affect financial distress. While Institutional ownership, the proportion of independent commissioners, the number of audit committee meetings, and audit committee competencies affect financial distress.