A Test of the Relationship Between Political Connection and Indirect Costs of Financial Distress in Indonesia
AbstractThis study finds that political connection affects indirect costs of financial distress in Indonesia. It applies changes of industry-adjusted operating profit and annualized changes of industry-adjusted sales as proxies of the costs. Evidence from 1997â€“2002 indicates that Indonesian firms with political connections lower their indirect costs of financial distress. Specifically, these results hold for the costs estimated as changes of industry sales after controlling for firm size, leverage, portion and complexity of bank loan. Also, there is significant difference in level of indirect costs of financial distress between politically connected and non-politically connected firms. The findings suggest that being politically connected provide significant benefits for financially distressed firms.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Penerbit Universiti Sains Malaysia in its journal Asian Academy of Management Journal of Accounting and Finance.
Volume (Year): 3 (2007)
Issue (Month): 2 ()
political connection; financial distress; corporate performance; indirect cost of financial distress;
You can help add them by filling out this form.
reading list or among the top items on IDEAS.Access and download statisticsgeneral information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Journal Division).
If references are entirely missing, you can add them using this form.