The Effect of Macroeconomics, Firm Size, Assets Growth, and Liquidity on Financial Distress and Hedging with Good Corporate Governance as a Moderation Variable in Manufacturing Companies Listed on the Indonesia Stock Exchange
Journal Title: International Journal of Social Science Humanity & Management Research - Year 2023, Vol 2, Issue 12
Abstract
Changes in currency exchange rates have an impact on currency appreciation and depreciation. One alternative that can help in managing risks arising from fluctuations in exchange rates is by utilizing hedging instruments. This research aimed to investigate the empirical evidence regarding the effect of macroeconomics, firm size, asset growth and liquidity on financial distress and hedging with good corporate governance as a moderation variable. The population were manufacturing companies listed on the Indonesian stock exchange and implementing hedging strategy in 2020-2022. Seventeen companies were selected as samples using purposive sampling techniques. Hypothesis testing was carried out by means of Structural Equation Model (SEM) approach based on the Partial Least Square (PLS). Among the 10 analysed hypotheses, 5 were proven to be accepted and the other 5 were rejected. The findings show the followings. The 2 exogenous variables (macroeconomics and asset growth) affected the endogenous variable (hedging), meanwhile the other 3 exogenous variables (firm size, liquidity and financial distress) did not affect it. The 3 exogenous variables (firm size, asset growth and liquidity) were proven to influence the endogenous variable (financial distress), whereas the variable of macroeconomics was not proven as such. Meanwhile, good corporate governance, as a moderation variable, did not provide full support for the causal relationship between financial distress and hedging.
Authors and Affiliations
Syaiful Rizai, Tri Ratnawati, Ulfi Pristiana
Keywords
Related Articles
- EP ID EP731103
- DOI 10.58806/ijsshmr.2023.v2i12n11
- Views 48
- Downloads 0
Mutual Health Insurance Model: Strategic Axis for Access to Health Care for Households in the DRC. Case Analysis of the Mutuelle De Santé De Kinshasa
This paper analyzes the issue of access to health care for households with health care needs while facing several constraints. According to the World Health Organization (WHO), the risk of a child dying before his or her...
Tokombere: From Interethnic Battles to Linguistic Conflicts: A Sketch of Language Practices Management
This article provides an outline of the development of language practices in the mountains and plains of Tokombere characterized by the identity response and inter-ethnic conflicts which have raged there for decades or e...
Evaluating Organizational Outcomes (Oos) of One State University in the Philippines: Basis for Policy Recommendation and Adoption
Higher Education Institutions in the Philippines are mandated to perform three major functions-Instruction, Research, and Extension while ensuring their sustainability through a sound Management of Resources. This study...
Parental Involvement and Performance among Grade Three Pupils
This study aimed to find out the significant relationship between parental involvement and pupils’ performance at Milagrosa Elementary School. This study utilized the descriptive-correlation type of research. The respond...
Political Influence in Administration of Public University Nigeria: Effects and Way Forward
Universities by nature are to operate in a fully autonomous system. University autonomy is a principle upon which the university system normally operates and through which operational stability and actualization of goals...