JAKARTA ISLAMIC INDEX: COVID-19 PANDEMIC AND POTENTIAL FINANCIAL DISTRESS
Downloads
This research aims to analyze the potential for financial distress of Islamic companies that are included in the Jakarta Islamic Index during pandemic of COVID-19, which is using profitability ratios, liability ratios, and liquidity ratios (Zwesky's Model). The sample is quarterly (2019 to 2020) and it is using the Generalized Method of Moments (GMM) panel data model approach that was developed by Arellano and Bond (1991). The results of this study indicate that the profitability ratio has the most influence on corporate financial distress and from the overall this research occurs in the process of decreasing company financial performance during pandemic of COVID-19. Moreover, there is one company that indicates financial distressed, there are twenty-two companies that experienced a decline in financial performance, but there are 7 companies that experiences better financial performance when the COVID-19 pandemic occurred. In one hand, this shows that COVID-19 has a broad effect on the decline in the financial performance of sharia companies. On the other hand, it has a positive impact on certain companies that works specifically in sectors which is related to information technology.
Arellano, M., & Bond, S. (1991). Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Aplication to Employment Equations. The Review of Economic Studies, 58(2), 277–297. https://doi.org/10.2307/2297968
Arnani, M. (2020). Timeline Wabah Virus Corona, Terdeteksi pada Desember 2019 hingga Jadi Pandemi Global. Kompas.Com. https://www.kompas.com/tren/read/2020/03/12/113008565/timeline-wabah-virus-corona-terdeteksi-pada-desember-2019-hingga-jadi?page=all
Ashraf, S., Félix, E. G. S., & Serrasqueiro, Z. (2019). Do Traditional Financial Distress Prediction Models Predict the Early Warning Signs of Financial Distress? Journal Risk Financial Management, 12(2), 55. https://doi.org/10.3390/jrfm12020055
Avenhuis, J. O. (2013). Testing The Generalizability of The Bankruptcy Prediction Models of Altman, Ohlson, and Zmijewski for Dutch Listed and Large Non-Listed Firms [University of Twente]. http://essay.utwente.nl/64326/
Bărbuță-Mișu, N., & Madaleno, M. (2020). Assesment of Bankruptcy Risk of Large Companies: European Countries Evolution Analysis. Journal of Risk and Financial Management, 13(3), 58. https://doi.org/10.3390/jrfm13030058
Brigham, E. F., & Ehrhardt, M. C. (2011). Financial Management: Theory and Practice (O. H. Mason (ed.); 13th ed.). South-Western Cengage Learning.
Chowdhury, M. I. H., Balli, F., & de Bruin, A. (2021). Islamic Equity Markets Versus Their Conventional Counterparts in the COVID-19 Age: Reaction, Resilience, and Recovery. International Review of Finance, 1–10. https://doi.org/10.1111/irfi.12349
Copeland, T. E., & Weston, J. F. (1988). Financial Theory and Corporate Policy (3rd ed.). Addison-Wesley Publishing Co.
Didier, T., Huneeus, F., Larrain, M., & Schmukler, S. L. (2021). Financing Firms in Hibernation during The COVID-19 Pandemic. Journal of Financial Stability, 53. https://doi.org/10.1016/j.jfs.2020.100837
Fernandes, N. (2020). Economic Effects of Coronavirus Outbreak (COVID-19) on the World Economy (WP-1240-E). https://doi.org/10.2139/ssrn.3557504
Fosberg, R. H. (2012). Capital Structure and Financial Crisis. Journal of Finance and Accountancy, 11(3), 1–10. https://www.aabri.com/jfa.html
Greenwood, R., Iverson, B., & Thesmar, D. (2020). SIZING UP CORPORATE RESTRUCTURING IN THE COVID CRISIS (No. 28104). https://doi.org/10.3386/w28104
Habir, M. T., & Wardana, W. (2020). COVID-19's Impact on Indonesia's Economy and Financial Markets. http://hdl.handle.net/11540/12952
Jaballah, J., Peillex, J., & Weill, L. (2018). Is Being Sharia compliant worth it? Economic Modelling, 72, 353–362. https://doi.org/10.1016/j.econmod.2018.02.011
Kasmir, K. (2014). Bank Dan Lembaga Keuangan Lainnya. Raja Grafindo Persada.
Khudyakova, T. A., & Shmidt, A. V. (2019). Impact of The Global Recession on Financial and Economic Sustainability of Industrial Companies. European Research Studies Journal, 22(1). https://www.um.edu.mt/library/oar/handle/123456789/41234
Lemos, J. A. R. (2017). The Impact of FInancial Crisis on Portugese Firms' Capital Structure [University Institute of Lisbon]. https://repositorio.iscte-iul.pt/handle/10071/15763
Listyorini, L. (2020). Memahami tentang Pembatasan Sosial Berskala Besar (PSBB). Investor.Id. https://investor.id/investory/memahami-tentang-pembatasan-sosial-berskala-besar-psbb
Njiforti, O. (2015). Impact of The 2007-2008 Global Financial Crisis on th eStock Market in Nigeria. Journal of Applied Statistics, 6(1), 49–68. https://dc.cbn.gov.ng/jas/vol6/iss1/3/
OECD. (2020). Insolvency and Debt Overhang Following the COVID-19 Outbreak: Assessment of Risks and Policy Responses. Tackling Coronavirus Series. https://www.oecd.org/coronavirus/policy-responses/insolvency-and-debt-overhang-following-the-COVID-19-outbreak-assessment-of-risks-and-policy-responses-7806f078/#annex-d1e2417
Prusak, B. (2018). Review of Research into Enterprise Bankruptcy Prediction in Selected Central and Eastern European Countries. International Journal of FInancial Studies, 6(3), 1–28. https://doi.org/10.3390/ijfs6030060
Robinson, T. R., van Greuning, H., Henry, E., & Broihahn, M. A. (2008). International Financial Statement Analysis. John Wiley & Sons.
Sahoo, M. (2021). COVID-19 impact on stock market: Evidence from the Indian stock market. Journal of Public Affairs. https://doi.org/10.1002/pa.2621
Saji, T. G. (2018). Financial Distress and Stock Market Failures: Lessons from Indian Realty Sector. Vision: The Journal of Business Perspective, 22(1), 50–60. https://doi.org/10.1177/0972262917750244
Samour, S., & Hassan, L. (2016). Capital Structure and Firm Performance: Did the Financial Crisis Matter?: A cross-industry study [Uppsala University]. http://uu.diva-portal.org/smash/record.jsf?pid=diva2%3A944378&dswid=-3178
Tsoy, L., & Heshmati, A. (2017). Impact of Financial Crises on Dynamics of Capital Structure: Evidence from Korean Listed Companies (IZA DP No. 10554). https://ideas.repec.org/p/iza/izadps/dp10554.html
UNCTAD. (2021). World Investment Report 2021.
World Economic Outlook. (2020). World Economic Outlook, April 2020: The Great Lockdown. https://www-imf-org.translate.goog/en/Publications/WEO/Issues/2020/04/14/weo-april-2020.?_x_tr_sl=en&_x_tr_tl=id&_x_tr_hl=id&_x_tr_pto=nui,op
Copyright (c) 2021 JEBIS (Jurnal Ekonomi dan Bisnis Islam)
This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.
- Every manuscript submitted to JEBIS must obey to the policy and terms set by Journal of Economics and Business Islamic.
- Publication rights on the contents of manuscript published by JEBIS is owned by JEBIS under consent and approval by the corresponding author(s).
- Full text of electronic publication of manuscripts can be accessed free if used for the purpose of education and research according to copyright regulation.
- Share ” copy and redistribute the material in any medium or format
- Adapt ” remix, transform, and build upon the material
- You must give appropriate credit, provide a link to the license, and indicate if changes were made. You may do so in any reasonable manner, but not in any way that suggests the licensor endorses you or your use.
- You may not use the material for commercial purposes.
- If you remix, transform, or build upon the material, you must distribute your contributions under the same license as the original.
Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.