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Does earning management affect financial distress? Evidence from state-owned enterprises in Indonesia

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  • Nur Sayidah
  • Aminullah Assagaf
  • Zulfikar Faiz

Abstract

Financial distress in state-owned enterprises(SOEs) becomes a problem needing attention. This study aims to analyze the effect of earnings management, marketing productivity, and government subsidies on financial distress of SOEs with firm size as a control variable. The sample consisted of 19 state-owned companies receiving government subsidies and state capital participation in 2015–2017. The data analysis method used was a quantitative approach. The results showed that marketing productivity affected financial distress in state-owned companies receiving government subsidies in 2015–2017. High marketing productivity showed that SOEs were achieving high sales to meet public demand. Furthermore, earning management and subsidy had no effect on financial distress in state-owned companies. SOEs management performed earnings management within a certain limit so that it did not affect financial distress.

Suggested Citation

  • Nur Sayidah & Aminullah Assagaf & Zulfikar Faiz, 2020. "Does earning management affect financial distress? Evidence from state-owned enterprises in Indonesia," Cogent Business & Management, Taylor & Francis Journals, vol. 7(1), pages 1832826-183, January.
    • Handle: RePEc:taf:oabmxx:v:7:y:2020:i:1:p:1832826
    DOI: 10.1080/23311975.2020.1832826
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    Cited by:

    1. Yufei Cao & Abdulmajeed Mawhan H. Alfadhli & Mohammad Jaradat & Ramona Lile & Mihaela Gadoiu & Mariana Banuta & Daniela Mihai & Malik Shahzad Shabbir, 2024. "The impact of accounting practices on financial sustainability: A study of external block-holders and institutional ownership," Review of Managerial Science, Springer, vol. 18(7), pages 1945-1961, July.

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