Presenters: Asih Dewi Hastuti, Sayekti Endah Retno Meilani
Affiliation: UIN Raden Mas Said Surakarta
Room: 8
ICIES News- At the prestigious 4th International Conference on Islamic Economics Studies (ICIES) 2024, held this week, researchers Asih Dewi Hastuti and Sayekti Endah Retno Meilani from UIN Raden Mas Said Surakarta presented their empirical study titled “Financial Distress in View of Board Characteristics and Political Connections: An Empirical Study of Companies with Special Notations in Indonesia Stock Exchange.”
The study delves into the dynamics of financial distress within companies listed on the Indonesia Stock Exchange (IDX) that have special notations. By examining board characteristics and political connections, the researchers aimed to uncover their influence on financial distress conditions, with profitability serving as a control variable.
Using secondary data from the annual financial statements of 77 purposively sampled companies, Hastuti and Meilani applied a panel data analysis technique with the EViews 12 program. Their findings revealed a significant correlation between the representation of women on the board of commissioners and financial distress conditions. However, other factors such as the proportion of independent commissioners, the size of the board of commissioners, the size of the board of directors, the representation of women on the board of directors, and political connections did not show a significant impact.
The study’s scope was limited to examining political connections based on directors, board of commissioners, secretaries, board members with military backgrounds, and direct shareholders. It also focused on companies with specific special notations (B, M, A, E, D, S, C, Q, Y, F, G, V, X) on the IDX during the 2022-2023 period.
Hastuti and Meilani suggested that future research could broaden the criteria for political connections to include major shareholders or company owners with political ties. They also recommended increasing the sample size and incorporating additional variables to provide a more comprehensive understanding of the factors influencing financial distress.
The presentation sparked significant interest among attendees, offering valuable insights into the relationship between corporate governance and financial stability in the context of emerging markets. The findings hold important implications for policymakers, investors, and scholars dedicated to advancing corporate finance and governance practices.