Can ESG Save Zombie Companies During the Covid-19 Pandemic?
Abstract
This study examines the relationship between Environmental, Social, and Governance (ESG) and the zombie firm phenomenon. The study employs secondary data from the data provider Revinitif Eikon, encompassing companies listed on the Indonesia Stock Exchange (IDX) between 2018 and 2021, excluding the financial sector, and employing purposive sampling techniques for data collection. The collected data was then analyzed through logistic regression using SPSS software version 26. The findings indicate that ESG harms zombie companies, which suggests that ESG can prevent companies from becoming zombies. Companies with higher levels of ESG implementation are less likely to become zombies. This suggests that companies with strong ESG practices are more resilient to economic instability, especially during the COVID-19 pandemic. This study contributes to the literature on zombie companies and ESG and supports stakeholder theory and the triple bottom line concept. This study has practical implications for company management, providing insights on how to implement ESG principles in operational practices to ensure long-term sustainability. This study introduces novelty by integrating the context of the COVID-19 pandemic to investigate the correlation between ESG and zombie firms, while also adopting the more rigorous theoretical framework proposed by Hoshi et al., (2012) in assessing zombie companies, in contrast to Ren et al., (2022).
Keywords
Full Text:
PDFReferences
Adeneye, Y., and Kammoun, I. (2022). Real earnings management and capital structure: Does environmental, social and governance (ESG) performance matter? Cogent Business and Management, 9(1), 1–22.
Aydoğmuş, M., Gülay, G., and Ergun, K. (2022). Impact of ESG performance on firm value and profitability. In Borsa Istanbul Review, 22, S119–S127).
Biro Humas, K. (2020, November 24). Survei Kemnaker : 88 Persen Perusahaan Terdampak Pandemi Covid-19. KEMNAKER. Retrieved from https://kemnaker.go.id/news/detail/ survei-kemnaker-88-persen-perusahaan-terdampak-pandemi-covid-19
Chin, P. N. (2022). ESG rating and firm performance: Comparison among Singapore, Malaysia, Brunei, Indonesia and Thailand. International Journal of Accounting, Finance and Business (IJAFB), 7(43), 155–164.
CNN Indonesia. (2019, August 12). Rizal Ramli: 24 Perusahaan “Zombie” di BEI Picu Krisis 2020. CNN Indonesia. Retrieved from https://www.cnnindonesia.com/ekonomi/ 20190812151706-532-420571/rizal-ramli-24-perusahaan-zombie-di-bei-picu-krisis-2020
Detik News. (2022, November 17). Inilah Isi Lengkap Deklarasi KTT G20 Bali, Ada Poin Alot Soal Ukraina. Retrieved from https://news.detik.com/berita/d-6411054/ini-isi-lengkap-deklarasi-ktt-g20-bali-ada-poin-alot-soal-ukraina
El Ghoul, S., Guedhami, O., and Kim, Y. (2017). Country-level institutions, firm value, and the role of corporate social responsibility initiatives. Journal of International Business Studies, 48(3), 360–385.
Elkington, J. (1994). Cannibals with Forks.
Fischer, F. B. (2021). Zombie firms, corporate restructuring and relationship canking: Credit guidance as a key to tackle zombie lending? In Accounting, Economics and Law: A Convivium. De Gruyter Open Ltd.
Freeman, R. E., Parmar, B. L., Harrison, J. S., Wicks, A. C., Purnell, L., and De Colle, S. (2010). Stakeholder theory: The state of the art. Academy of Management Annals, 4(1), 403-445.
Harymawan, I., Putra, F. K. G., Fianto, B. A., and Wan Ismail, W. A. (2021). Financially distressed firms: Environmental, social, and governance reporting in Indonesia. Sustainability (Switzerland), 13(18).
Hoshi, T., Diego, S., & Kim, Y. (2012). Macroprudential Policy and Zombie Lending in Korea.
Kane, E. J. (1987). Dangers of capital forbearance: The case of the FSLIC and “Zombie” SandLs. Contemp. Econ. Policy, 5(1), 77–83.
Li, T. T., Wang, K., Sueyoshi, T., and Wang, D. D. (2021). Esg: Research progress and future prospects. In Sustainability (Switzerland), 13(21).
Nengzih, N. (2022). Carbon Emissions Intensity and Environmental Cost Effect on Corporate Financial Performance. Jurnal ASET (Akuntansi Riset), 14(2), 245–254.
Madyan, M., Sasikirono, N., and Maulidya, P. (2020). Zombie company and CSR performance zombie company and CSR performance with corporate governance and ownership with corporate governance and ownership as moderator variables. Riset Akuntansi Dan Keuangan Indonesia, 5(3), 249–261.
Novita, S., Tjahjadi and Irwanto. (2019). Zombie Dan Diversifikasi Dalam Masa Krisis Keuangan Global. Jurnal Reviu Akuntansi dan Keuangan, 9(3), 295-308.
Prihati, A., Tidar, U., Nibras, M., and Khabibah, A. (2022). Studi literatur: Pengaruh mekanisme Good Corporate Governance terhadap Financial Distress (Study literature: The effect of Good Corporate Governance mechanism on Financial Distress). Jurnal Akuntansi Universitas Jember, 20(2), 125–135.
Putri, C. M., and Puspawati, D. (2023). The effect of ESG disclosure, company size, and leverage on company’s financial performance in Indonesia. The International Journal of Business Management and Technology, 7(2), 252–262.
Qodary, H. F., and Tambun, S. (2021). Pengaruh Environmental, Social, Governance (ESG) dan retention ratio terhadap return saham dengan nilai perusahaan sebagai variabel moderating. Juremi: Jurnal Riset Ekonomi, 1(2), 159–171.
Rahmah, I., and Novianty, I. (2021). Comparative analysis of financial distress before and during the COVID-19 Pandemic: Empirical evidence in Indonesia. International Journal of Business, Economics and Law, 24(5), 216–222.
Ren, G., Li, J., Zhao, M., Liu, L., Zheng, M., and Jing, M. (2022). Can esg boost zombie firms back to normal: Evidence from Chinese firms. Research Square.
Safriani, M. N., and Utomo, D. C. (2020). Pengaruh Environmental, Social, Governance (ESG) Disclosure terhadap kinerja perusahaan. Diponegoro Journal of Accounting, 9(3), 1–11.
Sarumpaet, S., Dewi, F. G., Agustina, Y., and Amelia, Y. (2020). Studi eksperimen tentang pengaruh kinerja lingkungan dan sosial terhadap penilaian kredit perbankan. Jurnal ASET (Akuntansi Riset), 12(2), 384–403.
Selpiyanti, and Fakhroni, Z. (2020). Pengaruh implementasi green accounting dan material flow cost accounting terhadap sustainable development. Jurnal ASET (Akuntansi Riset), 12(1), 109–116.
Smith, P.A.C and Sharicz, C (2011). The shift needed for sustainability. The Learning Organization, 18(1), 73-86.
Sugiyono. (2010). Metode Penelitian Pendidikan Pendekatan Kuantitatif, Kualitatif, dan R&D. Alfabeta.
Teng, X., Wang, Y., Wang, A., Chang, B. G., and Wu, K. S. (2021). Environmental, social, governance risk and corporate sustainable growth nexus: Quantile regression approach. International Journal of Environmental Research and Public Health, 18(20).
Trisnowati, Y., Achsani, N. A., Sembel, R., and Andati, T. (2022). The Effect of ESG score, financial performance, and macroeconomics on stock returns during the pandemic era in Indonesia. International Journal of Energy Economics and Policy, 12(4), 166–172.
Widya Mitra, A., and Pria Anas, E. (2021). Impact of ESG/Corporate Social Responsibility on Company Performance before and during Covid 19 Crisis: Study of listed companies in Indonesia. International Journal of Business and Technology Management, 3(2), 143–155.
DOI: https://doi.org/10.17509/jaset.v16i1.59323
Refbacks
- There are currently no refbacks.
Jurnal ASET (Akuntansi Riset) is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
View My Stats Visitor