American Journal of Economics, Finance and Management
Articles Information
American Journal of Economics, Finance and Management, Vol.2, No.4, Aug. 2016, Pub. Date: Aug. 16, 2016
Financial Constraint: Evidence from Indonesia
Pages: 44-48 Views: 3807 Downloads: 1062
Authors
[01] Restu Warno Putra, Jalan TMP Kalibata, Universitas Trilogi, Jakarta, Indonesia.
[02] Dwi Sunu Kanto, Faculty of Economics and Business, Universitas Trilogi, Jakarta, Indonesia.
Abstract
Company needs funding to run their business activity such as corporate investment. Financial constraint is a market friction which could prevent or obstruct a company from obtaining fund. The purpose of this paper is to empirically test the effect of Corporate Social Responsibility disclosure, Good Corporate Governance disclosure, Corporate Risk, and cost of debt towards financial constraint within companies that are listed in Kompas 100 Index during 2012 – 2014. Sampling technique that is use in this paper is purposive sampling, and the number of companies as a sample is 68 companies. The variable independents that are used in this paper are Corporate Social Responsibility disclosure, Good Corporate Governance disclosure, Corporate Risk, and Cost of Debt, and the variable dependent is Financial Constraint. Analysis method that was used in this thesis is panel data regression with statistical software Eviews 9 Student Version. The results show that Corporate Social Responsibility disclosure has a significant and positive effect towards Financial Constraint, Good Corporate Governance disclosure has a significant and positive effect towards Financial Constraint, Corporate Risk has a significant and negative effect towards Financial Constraint, and Cost of Debt is not significant and has a negative effect towards financial constraint within companies that are listed in Kompas 100 Index during 2012 – 2014. One of the suggestions for companies that are listed in Kompas 100 Index is to give more attention towards Corporate Social Responsibility disclosure and Good Corporate Governance disclosure, and also pay attention towards Corporate Risk from Stock Price.
Keywords
Corporate Social Responsibility Disclosure, Good Corporate Governance Disclosure, Corporate Risk, Cost of Debt, And Financial Constraint
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