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Corporate Governance, Financial Ratios, Political Risk and Financial Distress, A Survival Analysis

Author

Listed:
  • Farida Titik Kristanti

    () (Faculty of Economics & Business, Telkom University, Indonesia. Author-2-Name: Aldrin Herwany Author-2-Workplace-Name: Faculty of Economics & Business, Universitas Padjadjaran, Indonesia)

Abstract

".Objective – The objective of this study was to investigate the factors like corporate governance, financial ratios, and political risk and their impacts on company’s survival. Methodology/Technique – Collecting data of Indonesian Stock Exchange from 2000 to 2014 and employing purposive random sampling, this research collects samples of 58 companies undergoing financial distress and 275 others which do not. Findings – The research eventually proves that agency theory and Asymmetric Information theory do occur in Indonesia. With Cox Proportional Hazard model, it then proves that all two models employed: independence commissioners, leverage, operating risk, size, return on asset and control of corruption, are variables which consistently affect financial distress of the company. Novelty – The study uses original data and gives supported suggestion for the researched issues."

Suggested Citation

  • Farida Titik Kristanti, 2017. "Corporate Governance, Financial Ratios, Political Risk and Financial Distress, A Survival Analysis," GATR Journals afr130, Global Academy of Training and Research (GATR) Enterprise.
    • Handle: RePEc:gtr:gatrjs:afr130
    as

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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Financial Distress; Financial Ratios; Corporate Governance; Political Risk.;

    JEL classification:

    • G01 - Financial Economics - - General - - - Financial Crises
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • M48 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Government Policy and Regulation

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