The Role of Corporate Governance in Financial Distress in Sharia Stocks Going Public on the Indonesia Stock Exchange
Abstract
Abstract. This research is motivated by several companies experiencing financial distress marked by the company's delisting from the Indonesia Stock Exchange. This study aims to analyze the effect of leverage, liquidity and family ownership structure on financial distress moderated by corporate governance. The population in this study are companies that have sharia shares that are included in the Jakarta Islamic Index (JII70) listed on the Indonesia Stock Exchange for the 2016-2019 period. The research sample is 216 companies that have been selected using the purposive sampling method. In this study, a logistic regression model and descriptive statistics were used for data analysis with the help of the Eviews 10.0 program. The results of the study show that leverage has a significant positive effect on financial distress. While liquidity has a significant negative effect on financial distress. Family ownership structure has a significant positive effect on financial distress. And corporate governance moderates the relationship between leverage, liquidity, and family ownership structure on financial distress.
Keywords: corporate governance and financial distress; family ownership structure; leverage; liquidity
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