Does Large-scale Social Restriction Affect Firms' Financial Performance?
To prevent the spread of the COVID-19 pandemic, the government has had some large-scale social restrictions (LSSR). As a side effect, many firms experienced a decrease in their revenues, which will decrease their financial performance. This research seeks to investigate how the COVID-19 pandemic aff...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
| Published: |
Institut Teknologi Bandung
2021-12-01
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| Series: | Asian Journal of Technology Management |
| Subjects: | |
| Online Access: | https://journal.sbm.itb.ac.id/index.php/ajtm/article/view/4245 |
| _version_ | 1798025943901536256 |
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| author | Muhamad Fikri Ana Noveria |
| author_facet | Muhamad Fikri Ana Noveria |
| author_sort | Muhamad Fikri |
| collection | DOAJ |
| description | To prevent the spread of the COVID-19 pandemic, the government has had some large-scale social restrictions (LSSR). As a side effect, many firms experienced a decrease in their revenues, which will decrease their financial performance. This research seeks to investigate how the COVID-19 pandemic affects financial performance of companies listed in the Indonesian stock exchange. To analyze the effect of the COVID-19 pandemic, an ordinary least square (OLS) regression is employed with a dummy variable of the period before and after the pandemic started. Furthermore, to examine the causal effect of LSSR, this study uses the difference-in-difference method with a dummy variable whether the businesses could still operate during the LSSR. The results show that COVID-19 pandemic has a significant negative effect on firms’ financial performance represented by ROA. Secondly, by employing panel-data regression with difference-in-difference, it is found that the LSSR has an insignificant effect on firms’ performance in affected firms. From the results, this research can contribute to the literature to see the effect of the large-scale social restrictions on firms’ financial performance. This research also can be used as a consideration for the government in making future policies to prevent the spread of the COVID-19 pandemic. |
| first_indexed | 2024-04-11T18:28:17Z |
| format | Article |
| id | doaj.art-057a78e7e6fc479194e20930e2c4e8cb |
| institution | Directory Open Access Journal |
| issn | 1978-6956 2089-791X |
| language | English |
| last_indexed | 2024-04-11T18:28:17Z |
| publishDate | 2021-12-01 |
| publisher | Institut Teknologi Bandung |
| record_format | Article |
| series | Asian Journal of Technology Management |
| spelling | doaj.art-057a78e7e6fc479194e20930e2c4e8cb2022-12-22T04:09:33ZengInstitut Teknologi BandungAsian Journal of Technology Management1978-69562089-791X2021-12-0114324525510.12695/ajtm.2021.14.3.4Does Large-scale Social Restriction Affect Firms' Financial Performance?Muhamad Fikri0Ana Noveria1School of Business and Management, Institut Teknologi Bandung IndonesiaSchool of Business and Management, Institut Teknologi Bandung IndonesiaTo prevent the spread of the COVID-19 pandemic, the government has had some large-scale social restrictions (LSSR). As a side effect, many firms experienced a decrease in their revenues, which will decrease their financial performance. This research seeks to investigate how the COVID-19 pandemic affects financial performance of companies listed in the Indonesian stock exchange. To analyze the effect of the COVID-19 pandemic, an ordinary least square (OLS) regression is employed with a dummy variable of the period before and after the pandemic started. Furthermore, to examine the causal effect of LSSR, this study uses the difference-in-difference method with a dummy variable whether the businesses could still operate during the LSSR. The results show that COVID-19 pandemic has a significant negative effect on firms’ financial performance represented by ROA. Secondly, by employing panel-data regression with difference-in-difference, it is found that the LSSR has an insignificant effect on firms’ performance in affected firms. From the results, this research can contribute to the literature to see the effect of the large-scale social restrictions on firms’ financial performance. This research also can be used as a consideration for the government in making future policies to prevent the spread of the COVID-19 pandemic.https://journal.sbm.itb.ac.id/index.php/ajtm/article/view/4245covid-19 pandemicdifference-in-differencefirms’ financial performancelarge-scale social restrictions |
| spellingShingle | Muhamad Fikri Ana Noveria Does Large-scale Social Restriction Affect Firms' Financial Performance? Asian Journal of Technology Management covid-19 pandemic difference-in-difference firms’ financial performance large-scale social restrictions |
| title | Does Large-scale Social Restriction Affect Firms' Financial Performance? |
| title_full | Does Large-scale Social Restriction Affect Firms' Financial Performance? |
| title_fullStr | Does Large-scale Social Restriction Affect Firms' Financial Performance? |
| title_full_unstemmed | Does Large-scale Social Restriction Affect Firms' Financial Performance? |
| title_short | Does Large-scale Social Restriction Affect Firms' Financial Performance? |
| title_sort | does large scale social restriction affect firms financial performance |
| topic | covid-19 pandemic difference-in-difference firms’ financial performance large-scale social restrictions |
| url | https://journal.sbm.itb.ac.id/index.php/ajtm/article/view/4245 |
| work_keys_str_mv | AT muhamadfikri doeslargescalesocialrestrictionaffectfirmsfinancialperformance AT ananoveria doeslargescalesocialrestrictionaffectfirmsfinancialperformance |