| Summary: | Financial distress have strong relationship to the bankruptcy of a company.
The occurance of financial distress can be predicted with corporate governance
mechanisms which are implemented in the company. This study aims to examine the
effect of ownership structure, board of comissioner size and independence of audit
comittee on financial distress. The ownership structure are measured by managerial
ownership, institutional ownership and outside blockholders ownership, board of
comissioners size is measured by the number of comissioners on the board of
comissioners, while the independence of audit comittee is measured by the
percentage of independent members on audit comittee. This study used the size of
company as control variable.
The population of this study are all of manufacturing companies listed on the
Indonesian Stock Exchange and published financial statement for period of 2009-
2012. Based on purosive sampling method, the sample of this study are 468
companies which are consist of 107 sample of financial distressed firms and 361
sample of non financial distressed firms. The criteria used to categorize a firm as
financial distressed firm is based on Interest Coverage Ratio which is less than one.
This study used logistic regression as an analyzing instrument. The methods of
analyzing consist of descriptive statistics, fit model test which used G test, Hosmer %
Lemeshow�s test and Cox & Snell�s R Square and Nagelkerke R Square and to test
the coefficient of variables of this study used Wald Test.
The results of this study indicate that the ownership structure has a significant
effect on financial distress while board of comissioner size and independence of
audit comittee have no effect on financial distress.
|
|---|