Survival analysis of Indonesian banking companies
Objective – Financial distress is an undesirable condition for any company. To avoid financial distress, and improve the overall financial status of a company, an understanding of the factors affecting financial distress is necessary. This research aims to identify the determinants of banking financial distress. Methodology/Technique – In this study, 41 banks comprised the sample, selected using purposive sampling. The survival cox proportional hazard analysis method to identify the determinant factors of survival of Indonesian Banks. Findings –The results show that that macro indicators (inflation and economic growth) have a significant effect on the banks’ financial distress. This implies that the government as a regulator must maintain the level of growth and inflation that stabilizes the economy so that banks can avoid financial distress. As for the banks’ management, they have an obligation to support government policies in maintaining growth and inflation. Novelty – The study uses the cox proportional hazard model. Type of Paper: Empirical. JEL Classification: G2O, G33. Keywords: Bank; Cox Model; Financial Distress; Survival Analysis. Reference to this paper should be made as follows: Kristanti, F.T. 2020. Survival analysis of Indonesian banking companies, J. Fin. Bank. Review, 5 (2): 39 – 47 https://doi.org/10.35609/jfbr.2020.5.2(1)