Analysis of Financial Distress Determinants and the Role of Corporate Governance for Risk Mitigation on Listed Indonesian Manufacturing Companies: COVID -19 Pandemic

Putri, Jessica and Bustaman, Yosman (2021) Analysis of Financial Distress Determinants and the Role of Corporate Governance for Risk Mitigation on Listed Indonesian Manufacturing Companies: COVID -19 Pandemic. Masters thesis, Swiss German University.

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Abstract

Corona Virus (COVID-19) pandemic has prompted a tremendous financial loss for a large number of organizations and business over the globe. Indonesia is also reported to have impacted by COVID-19 as there were declining on GDP for two consecutive quarter, in which COVID-19 pandemic existed, which may lead to Bankruptcy. Therefore, early prediction of bankruptcy is needed to prevent companies’ failure, and predictive tool of financial distress is needed for companies. Financial distress is a phrase used in corporate finance to indicate a situation where trouble breaks or breaches commitments to a company's stakeholders. If financial distress cannot be relieved, bankruptcy may result. Altman Z-Score is one of financial distress prediction tools that was found by Edward Altman (1986) and has been widely used to identify financial distressed companies in many industries across countries. Financial distress in this study was carried out at listed manufacturing companies, as the economic backbone of Indonesia. The purpose of this research is to look after the impact of COVID-19 on financial distress, and to determine the financial ratio and corporate governance estimator of financial distress using panel data regression analysis method. It is found that, COVID-19 pandemic statistically impacted financial distress of manufacturing companies in Indonesia and Return on Equity (ROE), firm size, institutional ownership is negatively affected financial distress of manufacturing companies while Debt to Asset (DAR) and independent commissionaire negatively affected financial distress of manufacturing companies in Indonesia. The measurement will also be aggregated into its sub-sector which consist of consumer goods industry, miscellaneous industry and basic and chemical industry.

Item Type: Thesis (Masters)
Uncontrolled Keywords: Corporate Governance, COVID-19, Financial Distress, Financial Ratios, Manufacturing Industries
Subjects: H Social Sciences > HD Industries. Land use. Labor > HD2741 Corporate governance
H Social Sciences > HD Industries. Land use. Labor > HD9720 Manufacturing industries
H Social Sciences > HF Commerce > HF5001 Business
H Social Sciences > HG Finance
R Medicine > RA Public aspects of medicine > RA644 Malaria, COVID-19
Divisions: Faculty of Business Administration and Communication > Department of Business Administration
Depositing User: Faisal Ifzaldi
Date Deposited: 12 Jan 2022 02:55
Last Modified: 12 Jan 2022 02:55
URI: http://repository.sgu.ac.id/id/eprint/2311

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