IDEAS home Printed from https://ideas.repec.org/a/bsa/jtaken/v9y2023i1p1-16id1088.html
   My bibliography  Save this article

Financial Distress and the Commitment to Promoting Innovation in State-Owned Enterprises: A Critical Perspective

Author

Listed:
  • Rahmat Husein Andri Ansyah
  • Akbar Maulana Firmansyah

Abstract

Financial distress in State-Owned Enterprises (SOEs) has been a problematic issue for a long time. By 2020, the total debt of SOEs in Indonesia reach 1.682 trillion Rupiahs, whereas 68% out of all SOEs that receive state capital injections are facing bankruptcy. However, a more critical perspective still needs to investigate how commitment to promoting innovation relates to financial distress in SOEs. The existing studies of financial distress in SOEs have mainly focused on analyzing technical and structural factors and the predictive models using company financial indicators. This study aims to analyze the financial distress and innovation in SOEs critically. This study uses official data of PT Krakatau Steel from 2015-2020 and employs the combined analysis method. Quantitative regression analysis analyzes the company's financial distress throughout the period. In contrast, qualitative content analysis analyzes the relevance of the company's innovation commitment in the same period. The study shows that apart from ineffective capital structure decisions, low commitment to innovation is an important factor influencing financial distress in SOEs. The prospect of restructuring as a short-term strategy is also discussed.

Suggested Citation

  • Rahmat Husein Andri Ansyah & Akbar Maulana Firmansyah, 2023. "Financial Distress and the Commitment to Promoting Innovation in State-Owned Enterprises: A Critical Perspective," Jurnal Tata Kelola dan Akuntabilitas Keuangan Negara, Badan Pemeriksa Keuangan Republik Indonesia, vol. 9(1), pages 1-16.
    • Handle: RePEc:bsa:jtaken:v:9:y:2023:i:1:p:1-16:id:1088
    as

    Download full text from publisher

    File URL: https://jurnal.bpk.go.id/index.php/TAKEN/article/view/1088/240
    Download Restriction: no
    ---><---

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bsa:jtaken:v:9:y:2023:i:1:p:1-16:id:1088. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Dr. Selvia Vivi Devianti (email available below). General contact details of provider: https://jurnal.bpk.go.id/index.php/TAKEN/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.