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Determinants of the Success of Corporate Recovery in Financial Distressed Company

Author

Listed:
  • Giriati

    (University of Tanjungpura Pontianak, Indonesia Author-2-Name: Mustaruddin Author-2-Workplace-Name: University of Tanjungpura Pontianak, Indonesia Author-3-Name: M. Rustam Author-3-Workplace-Name: University of Tanjungpura Pontianak, Indonesia Author-4-Name: Author-4-Workplace-Name: Author-5-Name: Author-5-Workplace-Name: Author-6-Name: Author-6-Workplace-Name: Author-7-Name: Author-7-Workplace-Name: Author-8-Name: Author-8-Workplace-Name:)

Abstract

Objective - This study aims to examine and analyze the influence of severity, free assets, company size, asset retrenchment and CEO expertise on the success of recovery companies experiencing financial distress that are listed on the Indonesian Stock Exchange (IDX). Methodology/Technique - The population used in this study are all companies listed on the Indonesian Stock Exchange between 2011 and 2016. This study uses a simple logistic regression analysis to test the hypotheses. Findings - The results indicate that free assets and CEO expertise have a significant and positive effect on the success of a company's recovery. Meanwhile, variable severity, asset retrenchment and firm size do not affect the success of the company's recovery.

Suggested Citation

  • Giriati, 2018. "Determinants of the Success of Corporate Recovery in Financial Distressed Company," GATR Journals jfbr141, Global Academy of Training and Research (GATR) Enterprise.
    • Handle: RePEc:gtr:gatrjs:jfbr141
    as

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    References listed on IDEAS

    as
    1. Richard Whitaker, 1999. "The early stages of financial distress," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 23(2), pages 123-132, June.
    2. Gerry Johnson, 1986. "Corporate recovery: Successful turnaround strategies and their implementation, Stuart Slatter, Penguin, London, 1984. No. of pages: 429. Price £6.95," Strategic Management Journal, Wiley Blackwell, vol. 7(1), pages 99-100, January.
    3. Harlan Platt & Marjorie Platt, 2002. "Predicting corporate financial distress: Reflections on choice-based sample bias," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 26(2), pages 184-199, June.
    4. Syahida Binti & Zeni & Rashid Ameer, 2010. "Turnaround prediction of distressed companies: evidence from Malaysia," Journal of Financial Reporting and Accounting, Emerald Group Publishing Limited, vol. 8(2), pages 143-159, October.
    5. Laurie W. Paint, 1991. "An Investigation Of Industry And Firm Structural Characteristics In Corporate Turnarounds," Journal of Management Studies, Wiley Blackwell, vol. 28(6), pages 623-643, November.
    6. Mensah, Ym, 1984. "An Examination Of The Stationarity Of Multivariate Bankruptcy Prediction Models - A Methodological Study," Journal of Accounting Research, Wiley Blackwell, vol. 22(1), pages 380-395.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Turnaround/Recovery; ? Severity; Free Assets; Company Size; Asset Retrenchment; CEO Expertise.;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation
    • G39 - Financial Economics - - Corporate Finance and Governance - - - Other

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