The Determinants of Financial Distress: An Empirical Investigation of Indonesian Firms

Abstract

This study aims to investigate the determinants of financial distress (i.e., financial indicators, firm size, institutional and managerial ownership). The sample of this study includes 250 firms registered in Indonesia Stock Exchange (IDX) of the period 2014 – 2017. By using logistic regression analysis, the results show that 1) leverage has a positive effect on financial distress; 2) profitability, operating capacity, and firm size have a negative effect on financial distress; and 3) liquidity, sales growth, and institutional and managerial ownership have no effect on financial distress.