The Effect of Board and Ownership Structure on the Possibility of Financial Distress

Research aims: This study aims to examine the effect of corporate governance, specifically relating to the ownership structure and board structure, on the possibility of financial distress.Design/Methodology/Approach: The sample used in this study are companies listed on the Indonesia Stock Exchange (IDX) from 2015 to 2019, excluding the financial industry. Conditional logistic regression is used as the study uses paired data based on the total assets of the company.Research findings: The results of this study indicate that board ownership, independent commissioners, and the board of directors can increase the likelihood of financial distress. On the other hand, institutional ownership and concentrated ownership are proven to have no effect on the likelihood of financial distress. The results of sensitivity testing using logistic regression showed different results on the variable institutional ownership, which is that institutional ownership can increase the likelihood of financial distress. Meanwhile, the other variables showed the same outcome as the main regression used in this study.Theoretical contribution/Originality: This study contributes to the knowledge on the relationship of board ownership, institutional ownership, concentrated ownership, independent commissioners and board size and the possibility of financial distress. Also, this research found that the provision of incentives in the form of shares to the board may not be an effective way to overcome financial distress in Indonesian firms.

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Ownership concentration of three large Belgian banks during the crisis

Corporate Governance ◽

10.1108/cg-09-2014-0104 ◽

2015 ◽

Vol 15 (5) ◽

pp. 663-677

Author(s):

Jean-Charles Deudon ◽

Ana C. Marques ◽

Gerrit Sarens

Keyword(s):

Ownership Structure ◽

Financial Distress ◽

Point Of View ◽

Sources Of Information ◽

Content Type ◽

Concentrated Ownership ◽

Top Managers ◽

External Sources ◽

The One ◽

Year 2000

Purpose – In this paper, two different ownership structures in Belgian banks are studied to see whether this had an impact on how these banks went through the financial crisis of 2007-2008. On the one hand, there is the concentrated ownership structure with a number of major shareholders, while on the other hand, the ownership can be really dispersed with no shareholder having a significantly large stake and ability to influence management’s decisions. Design/methodology/approach – The authors study three large Belgians banks. Dexia and KBC followed the first model (concentrated ownership), while Fortis’ ownership was really dispersed since the year 2000. The authors perform several interviews with people involved with these banks during the crisis and analyze several external sources of information. Findings – The mitigating impact that major shareholders could have had on the – in hindsight – wrong decisions of Belgian banks’ top managers is found to be very limited. Therefore, it can be concluded that the dispersed ownership structure of Fortis was not an important factor in its collapse. Nevertheless, a concentrated ownership structure has been found out to help in case of financial distress, mainly because governments will be more inclined to participate to bailouts when a sound rescue strategy, elaborated with the help of a stable and concentrated ownership structure, is present. Originality/value – By performing interviews, the authors get an insider’s point of view of these banks during the crisis.

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Conservatism Determinants: Evidence from Indonesia Manufacturing Sector

KnE Social Sciences ◽

10.18502/kss.v3i26.5379 ◽

2019 ◽

Author(s):

Muhammad Tesar ◽

Lidiyawati .

Keyword(s):

Ownership Structure ◽

Financial Distress ◽

Manufacturing Industry ◽

Manufacturing Sector ◽

Institutional Ownership ◽

Financial Statements ◽

Accounting Conservatism ◽

Managerial Ownership ◽

Regression Methods ◽

Industry Sector

Accounting conservatism lead the preparation of ﬁnancial statements which in the act of recognize cost or loss estimates, but do not immediately recognise future revenues or proﬁts even though the probability of occurrence is large. This study aims to measure the factors that encourage companies to apply the principle of conservatism in the manufacturing industry sector with regression methods. Then it was found that; managerial ownership structure, institutional ownership structure, ﬁnancial distress, and company size simultaneously and partially do not have a signiﬁcant inﬂuence on the application of the principle of accounting conservatism. The existence of asymmetry information on ﬁnancial statements has thought to have an impact on the difﬁcultyofmeasuringthebasisofconservatismactions,as well as the determinants of factors beyond observation. Therefore, it was expected that the process of presenting ﬁnancialstatementscouldreﬂectmanagementperformanceindependentlyinorderto provide information according to its occurrence

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FAKTOR DETERMINAN FINANCIAL DISTRESS UNTUK PERUSAHAAN PERTAMBANGAN DI INDONESIA DAN MALAYSIA

Nominal Barometer Riset Akuntansi dan Manajemen ◽

10.21831/nominal.v10i2.35763 ◽

2021 ◽

Vol 10 (2) ◽

pp. 168-187

Author(s):

Arief Bagas Prasetyo ◽

Farida Titik Kristanti

Keyword(s):

Logistic Regression ◽

Financial Distress ◽

Negative Impact ◽

Institutional Ownership ◽

Managerial Ownership ◽

Descriptive Research ◽

Mining Companies ◽

Operating Capacity ◽

Processing Techniques ◽

The Impact

Abstrak: Faktor determinan Financial Distress Untuk Perusahaan Pertambangan Di Indonesia dan Malaysia. Studi ini bermaksud untuk mengetahui dampak likuiditas, leverage, operating capacity, instittutional ownership, managerial ownership, sertakomisaris independen padaFinancial Distress. Penelitian ini memakai penelitian deskriptif. Populasi serta sampel pada studi ialah perseroan sektor pertambangan yang tercatat di BursaEfek Indonesia dan Bursa Malaysia 2014-2018. Studi ini memakai purposive sampling serta diperoleh 12 perseoran di Indonesia dan 22 perseroan di Malaysia. Olah data yang dipakai studi ini memakai logistic regression. Studi menunjukkan pada perseroan pertambangan di Indonesia bahwa operatingcapacity scara parsial mempunyai pengaruh signifikan negatif pada financial distress. Sedangkan liquidity ,leverage, institutional ownership, managerial ownership, dan independent comissioner secara parsial tidak mempunyai pengaruh pada financial distress. Kemudian pada perseroan pertambangan di Malaysia menunjukkan bahwa liquidity, Managerial Ownership, dan Independent Commissioner secara parsial mempunyai pengaruh signifikan negatif pada financial distress. Sedangkan operating capacity,leverage, dan Institutional Ownership secara parsial tidak mempunyai pengaruh pada financial distress.Kata kunci: Liquidity, Leverage, OperatingCapacity, Institutional Ownership, Managerial Ownership, Independent Commissioner, Financial DistressAbstract: Determinants ofFinancial Distressfor Mining Companies in Indonesia and Malaysia. Research intend todetermine the impact ofliquidity, leverage, operatingcapacity, institutional ownership, managerialownership, and independent commissioner onfinancial distress. This research uses descriptive research. Thepopulation and sample are miningsector firm registered onthe IDX and Malaysia Exchange 2014-2018. This study uses purposivesamplingmethod acquired 12 companies in Indonesia and 22 companies in Malaysia. The data processing techniques used logisticregression. Research showed mining companies in Indonesia that their operating capacityhas a negative impact on financial distress. Whereas, liquidity,leverage, institutionalownership, managerialownership, and the independentcommissioner didn’t have affects onfinancial distress. Then the mining companies in Malaysia showed that liquidity, Managerial Ownership, and Independent Commissionerhave a negative impact onfinancial distress. Meanwhile, operating capacity, leverage, and institutional ownership didn’t have affects on financial distress.Keywords: Liquidity, Leverage, OperatingCapacity, Institutional Ownership, Managerial Ownership, Independent Commissioner, Financial Distress

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ANALISIS RASIO KEUANGAN TERHADAP FINANCIAL DISTRESS DENGAN STRUKTUR KEPEMILIKAN SEBAGAI VARIABEL MODERASI

Jurnal Akuntansi ◽

10.46806/ja.v8i2.619 ◽

2020 ◽

Vol 8 (2) ◽

Author(s):

Felicia Komala ◽

Yustina Triyani

Keyword(s):

Ownership Structure ◽

Financial Distress ◽

Stock Exchange ◽

Sampling Technique ◽

Institutional Ownership ◽

Sufficient Evidence ◽

Financial Ratio ◽

Financial Condition ◽

Financial Ratio Analysis ◽

Steep Decrease

Financial distress is a steep decrease in the company's financial condition before the company went bankrupt. Financial distress can be analyzed through financial ratios and the ownership structure of the company. This study used logistic regression analysis. The sampling technique is non-probability sampling using a purposive sampling method. The study sample consisted of 70 companies on the Stock Exchange from the 2015-2017 period. Based on regression, Grover, the Springate model showed that the model can predict the value of observation. The results indicate there is sufficient evidence that tends to leverage positively affects both financial distress with Grover and Springate model, a firm's growth tends to negatively affect financial distress with the Springate model, and institutional ownership tends to weaken the influence of leverage to financial distress with Springate model. On the other hand, there is not enough evidence that the firm's growth tends to negatively affect the financial distress with the Grover model. Managerial ownership does not affect moderate leverage and growth of the firm towards better financial distress with the Grover and Springate model. Institutional ownership does not affect moderating leverage of financial distress relationship with the Grover model. Institutional ownership does not affect the firm's growth to moderate the relationship financial distress with Grover or Springate model.Keywords: Financial ratio analysis, Ownership structure, Financial distress

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Impak Struktur Modal, Struktur Kepemilikkan dan Karakteristik Perusahaan Terhadap Financial Distress dan Financial Health Perusahaan

Jurnal Ekonomi dan Bisnis Dharma Andalas ◽

10.47233/jebd.v23i1.199 ◽

2021 ◽

Vol 23 (1) ◽

pp. 135-149

Author(s):

Ratnawati Raflis ◽

Enny Arita

Keyword(s):

Logistic Regression ◽

Capital Structure ◽

Financial Performance ◽

Ownership Structure ◽

Financial Distress ◽

Stock Exchange ◽

Financial Health ◽

Z Score ◽

Score Model ◽

The Impact

Corona Virus Pandemic affected the world economy, including Indonesia. Many companies are out of business due to this pandemic.With the background of the conditions mentioned above, the researchers are interested in examining more deeply the variables that determine the level of financial distress and at the same time the financial health of the company. Furthermore, the variables that are used as independent variables and are thought to affect the company's financial performance are capital structure, ownership structure and company characteristics. In assessing financial performance, the Altman Z Score model is used and then to see the impact of the variables that are thought to affect the company's financial performance.The research model used is the Logistic Regression equation.Population and sample are taken from financial data of companies listed on the Indonesia Stock Exchange. Data is taken manually on the website: www.idx.co.id. And the period in this study was taken from 2015-2019. The test results prove that the Capital Structure and Ownership Structure are factors that have a significant influence on the Company's Financial Distress and Financial Health. ABSTRAK Pandemi Virus Corona berimbas pada perekonomian dunia tidak terkecuali pada perekonomian di Indonesia. Banyak perusahaan yang gulung tikar akibat pandemik ini. Dengan berlatar belakang kondisi tersebut diatas maka peneliti tertarik untuk mengkaji lebih dalam menentukkan variabel yang sangat menentukan tingkat Financial Distress dan sekaligus financial health (Kinerja Keuangan) perusahaan. Selanjutnya variabel yang di jadikan variabel independen dan di duga berpengaruh terhadap kinerja keuangan perusahaan adalah struktur modal, struktur kepemilikkan dan Kharakteristik Perusahaan. Dalam menilai kinerja keuangan maka digunakan model Altman Z Score dan selanjutnya untuk melihat dampak variabel yang di duga berpengaruh terhadap kinerja keuangan perusahaan. Model penelitian yang di pakai adalah persamaan Logistic Regression. Model ini kemudian akan di lakukan uji T , Uji F dan Uji Asumsi Klasik sebelum di gunakan dalam melihat signifikasi variabel independen terhadap variabel dependen. Populasi dan sampel diambil dari data keuangan perusahaan yang terdaftar di Bursa Efek Indonesia. Data diambil secara manual di website: www.idx.co.id. Periode pada penelitian ini diambilkan data dari tahun 2015-2019. Hasil Pengujian membuktikan bahwa Struktur Modal dan Struktur Kepemilikkan adalah faktor yang sangat berpengaruh signifikan terhadap Financial Distress dan Financial Health Perusahaan.

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Financial distress and ownership structure: The case of Serbia

Acta Oeconomica ◽

10.1556/032.2017.67.1.2 ◽

2017 ◽

Vol 67 (1) ◽

pp. 21-41

Author(s):

Dragana Radjen ◽

Nemanja Stanisic

Keyword(s):

Corporate Governance ◽

Logistic Regression ◽

Ownership Structure ◽

Financial Distress ◽

Key Management ◽

Binary Logistic Regression ◽

Corporate Governance Mechanisms ◽

Two Factors ◽

Management Positions ◽

The Republic

The main objective of our research is to examine the effects of financial distress on ownership structure and to elaborate on the factors that influence change of ownership in companies that have adopted a reorganisation plan in the Republic of Serbia. Of the 63 sample companies reorganised in bankruptcy proceedings between 2009 and 2015, the ownership structure remained unchanged in 49 companies, while in 35, the existing owners or their family members remained in charge of key management positions. Using binary logistic regression, we observed that two factors influenced the change in ownership structure: the length of time it takes to resolve the insolvency process and whether the owners were involved in the running of the distressed company before it filed for bankruptcy. The obtained results indicate that corporate governance mechanisms in distressed Serbian companies are not efficient.

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PENGARUH FINANCIAL DISTRESS, GROWTH OPTIONS, INSTITUTIONAL OWNERSHIP, DAN DEBT TO EQUITY RATIO (DER) TERHADAP AKTIVITAS HEDGING PADA PERUSAHAAN MANUFAKTUR YANG TERDAFTAR DI BURSA EFEK INDONESIA PERIODE 2016-2019

JAKPI - Jurnal Akuntansi, Keuangan & Perpajakan Indonesia ◽

10.24114/jakpi.v8i2.21354 ◽

2020 ◽

Vol 8 (2) ◽

pp. 72

Author(s):

Erny Luxy D. Purba ◽

Monica Aprillia Rajagukguk

Keyword(s):

Logistic Regression ◽

Data Collection ◽

Financial Distress ◽

Quantitative Research ◽

Stock Exchange ◽

Institutional Ownership ◽

Growth Options ◽

Manufacturing Companies ◽

Quantitative Research Methods ◽

Equity Ratio

ABSTRACT : This research aims to determine the effect of Financial Distress, Growth Options, Institutional Ownership and Debt to Equity Ratio (DER) on Hedging Activities in Manufacturing companies listed on the Indonesia Stock Exchange 2016-2019. To achieve that goal, this research using quantitative research methods to examine the population or a specific sample in order to test the hypothesis that have been set. The technique of data collection is done by libraries and documentation techniques. This research using the method of logistic regression because this method is the most representative to examine the variables examined. The results of this research indicate: (1) Financial distress has an effect on hedging activity (2) Growth Options has no significant effect on hedging activity (3) Instititional ownership has an effect on hedging activity (4) Debt to equity ratio has an effect on hedging activity. And simultaneously financial distress, growth options, institutional ownership and debt to equity ratio affect hedging activity.Keywords : Financial Distress, Growth Options, Institutional Ownership, Debt to Equity Ratio, Hedging.

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Analisis Pengaruh Financial Indicators dan Ownership Structure untuk Memprediksi Kondisi Financial Distress (Studi pada Sektor Industri Perdagangan, Jasa, dan Investasi yang Terdaftar di BEI Tahun 2014-2018)

Jurnal Ilmu Manajemen ◽

10.26740/jim.v9n2.p723-737 ◽

2021 ◽

Vol 9 (2) ◽

pp. 723

Author(s):

Elyia Rosiana Savitri ◽

Purwohandoko Purwohandoko

Keyword(s):

Ownership Structure ◽

Financial Distress ◽

Institutional Ownership ◽

Managerial Ownership ◽

Financial Indicators ◽

Return On Assets ◽

Logistic Regression Method ◽

A Company ◽

Tax Deduction ◽

Research Period

Financial distress is the stage when a company experiences a decline in financial performance before bankruptcy occurs. This study aims to examine the effect of financial indicators and ownership structure on financial distress. The independent variables in financial indicators include profitability, activity, growth, liquidity, and leverage. The ownership structure includes managerial ownership and institutional ownership. This research period is for five years, from 2014 to 2018. This study's population are companies in the trade, services, and investment sectors. Samples were taken using the purposive sampling method and obtained 16 companies as samples. The results of data analysis using the logistic regression method. The results showed that the current ratio and debt to assets ratio significantly affected financial distress. Meanwhile, the variables return on assets, total assets turnover, sales growth, managerial ownership, and institutional ownership do not significantly affect financial distress. The solution that the trade, service can carry out, and investment industry sector that has negative EPS in a row is to pay off short-term obligations within a predetermined period and maximize the benefits of debt as a tax deduction so that financial distress for companies can be avoided.

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Analisis Pengaruh Rasio Keuangan, Kepemilikan Manajerial, dan Kepemilikan Institusional terhadap Financial Distress pada Perusahaan Sektor Perdagangan, Jasa, dan Investasi yang Terdaftar di BEI Tahun 2015-2018

Jurnal Ilmu Manajemen ◽

10.26740/jim.v8n3.p894-908 ◽

2020 ◽

Vol 8 (3) ◽

pp. 894

Author(s):

Ainnun Masita ◽

Purwohandoko Purwohandoko

Keyword(s):

Financial Distress ◽

Stock Exchange ◽

Institutional Ownership ◽

The Other ◽

Sampling Techniques ◽

Managerial Ownership ◽

Return On Assets ◽

Current Ratio ◽

Independent Variables ◽

Spss Software

Financial distress causes the company to restructure or even going bankrupt. It means the prediction of financial distress is important to anticipate the occurrence of bankruptcy. This study aimed to determine the effect of financial ratios, managerial ownership, and institutional ownership on financial distress. The independent variables used in this study are the current ratio, debt to assets ratio, return on assets, total assets turnover, managerial ownership, and institutional ownership. This research’s population is sector trade, services, and investment firms listed on the Indonesia Stock Exchange in 2015-2018. It implements purposive sampling techniques and finally obtained 15 firms as samples. The research then is analyzed using logistic regression and calculated using SPSS software version 25. The result showed that debt to assets ratio had a positive significance on financial distress and return on assets had a negative significant effect on financial distress. While the other variables of total assets turnover, current ratio, managerial ownership, institutional ownership don’t have a significant effect on financial distress. Therefore, the companies are expected to pay attention to increasing the value of debt to assets ratio and return on assets to avoid the possibility of financial distress.

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STRUKTUR KEPEMILIKAN DAN FINANCIAL DISTRESS: STUDI PADA PERUSAHAAN MAKANAN DAN MINUMAN YANG TERDAFTAR DI BURSA EFEK INDONESIA

Jurnal REKSA Rekayasa Keuangan Syariah dan Audit ◽

10.12928/j.reksa.v8i1.3395 ◽

2021 ◽

Vol 8 (1) ◽

pp. 1

Author(s):

Dhealelia Munandari ◽

Putu Ayu Indira Savitri Suryana

Keyword(s):

Logistic Regression ◽

Regression Analysis ◽

Significant Influence ◽

Financial Distress ◽

Research Method ◽

Stock Exchange ◽

Institutional Ownership ◽

Foreign Ownership ◽

Government Ownership ◽

Insider Ownership

The purpose of this study was to determine the effect of institutional ownership, insider ownership, government ownership and foreign ownership on the likelihood of companies experiencing financial distress. The sample used is 20 food and beverages companies listed on the Indonesia Stock Exchange for the 2017 - 2019 period. The research method used is using logistic regression analysis. Foreign ownership has a significant influence on the likelihood of financial distress. Meanwhile, institutional ownership, insider ownership and government ownership do not have a significant effect on the likelihood of financial distress in this study.This study aims to determine the effect of institutional ownership, insiderownership, government ownership and foreign ownership on the likelihoodof companies experiencing financial distress. The sample used is 20 foodand beverages companies listed on the Indonesia Stock Exchange for the2017 - 2019 period. The research method used is using logistic regressionanalysis. Foreign ownership has a significant influence on the likelihood offinancial distress. Meanwhile, institutional ownership, insider ownership andgovernment ownership do not have a significant effect on the likelihood offinancial distress in this study.

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