Bankruptcy Risk Among Indonesian Stock Exchange Listed Companies

Setiawan, A; Dalimunthe Z; Rizkianto E. 2019. Bankruptcy Risk among Indonesian Stock Exchange Listed Companies, J. Fin. Bank. Review 4 (4): 122 – 127 DOI:10.35609/jfbr.2019.4.4(2)

6 Pages Posted: 10 Mar 2020

See all articles by Anton Setiawan

Anton Setiawan

Universitas Indonesia, Faculty of Economics and Business, 16424, Indonesia

Zuliani Dalimunthe

Universitas Indonesia, Faculty of Economics and Business, 16424, Indonesia

Eko Rizkianto

Universitas Indonesia, Faculty of Economics and Business, 16424, Indonesia

Date Written: December 31, 2019

Abstract

Objective - This research analyses whether there was a change in bankruptcy risk of companies in Indonesia for the period between 2015–2018, during the first presidency period of Joko Widodo, when Indonesia experienced tremendous dynamic economic, political and technological change. Previous research generally discusses the predictability of bankruptcy models, whereas this study analyses how the dynamics of the bankruptcy risk of companies in Indonesia using the most widely known and recognized models.

Methodology/Technique – We employed a Wilcoxon-rank test to evaluate whether there are differences in the bankruptcy risk of companies year to year for the overall company and for each sector. We evaluated 154 companies listed on the Indonesian Stock Exchange.

Findings – We found that the number of companies categorized in the bankruptcy zone increased every year and almost doubled during the studied time period (49 companies in 2013 compared to 90 companies in 2018).

Novelty – The analysis shows that there is a significant number of companies that experienced bankruptcy risk each year, except for the periods between 2013 to 2014 and 2016 to 2017. On average, when we look at more detail for sectors and each year, the results show statistically significant increasing bankruptcy risk in all sectors except the transportation sector.

Type of Paper - Empirical.

Keywords: Bankruptcy Risk; Corporate Bankruptcy Prediction; Altman Z-score; Wilcoxon Rank-test; Indonesia

JEL Classification: G32, G33, E66

Suggested Citation

Setiawan, Anton and Dalimunthe, Zuliani and Rizkianto, Eko, Bankruptcy Risk Among Indonesian Stock Exchange Listed Companies (December 31, 2019). Setiawan, A; Dalimunthe Z; Rizkianto E. 2019. Bankruptcy Risk among Indonesian Stock Exchange Listed Companies, J. Fin. Bank. Review 4 (4): 122 – 127 DOI:10.35609/jfbr.2019.4.4(2), Available at SSRN: https://ssrn.com/abstract=3534114

Anton Setiawan (Contact Author)

Universitas Indonesia, Faculty of Economics and Business, 16424, Indonesia

Jl. Prof. Sumitro Djojohadikusumo
Depok, DKI 16424
Indonesia

Zuliani Dalimunthe

Universitas Indonesia, Faculty of Economics and Business, 16424, Indonesia

Jl. Prof. Sumitro Djojohadikusumo
Depok, DKI 16424
Indonesia

Eko Rizkianto

Universitas Indonesia, Faculty of Economics and Business, 16424, Indonesia

Jl. Prof. Sumitro Djojohadikusumo
Depok, DKI 16424
Indonesia

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