Article Sidebar

Download
PDF
Statistic
Read Counter : 33 Download : 0

Downloads

Download data is not yet available.

Main Article Content

Abstract

Abstract. To prevent the spread of the COVID-19 pandemic, the government has had some large-scale social restrictions (LSSR). As a side effect, many firms experienced a decrease in their revenues, which will decrease their financial performance. This research seeks to investigate how the COVID-19 pandemic affects financial performance of companies listed in the Indonesian stock exchange. To analyze the effect of the COVID-19 pandemic, an ordinary least square (OLS) regression is employed with a dummy variable of the period before and after the pandemic started. Furthermore, to examine the causal effect of LSSR, this study uses the difference-in-difference method with a dummy variable whether the businesses could still operate during the LSSR. The results show that COVID-19 pandemic has a significant negative effect on firms’ financial performance represented by ROA. Secondly, by employing panel-data regression with difference-in-difference, it is found that the LSSR has an insignificant effect on firms’ performance in affected firms. From the results, this research can contribute to the literature to see the effect of the large-scale social restrictions on firms’ financial performance. This research also can be used as a consideration for the government in making future policies to prevent the spread of the COVID-19 pandemic.

Keywords: COVID-19 pandemic, difference-in-difference, firms’ financial performance, large-scale social restrictions

Keywords

COVID-19 pandemic difference-in-difference firms’ financial performance large-scale social restrictions

Article Details

License
Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.

Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License. Copyright @2017. This is an open-access article distributed under the terms of the Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License (http://creativecommons.org/licenses/by-nc-sa/4.0/) which permits unrestricted non-commercial used, distribution and reproduction in any medium 

How to Cite
Fikri, M., & Noveria, A. (2025). Does Large-scale Social Restriction Affect Firms’ Financial Performance?. The Asian Journal of Technology Management (AJTM), 14(3), 245–255. https://doi.org/10.12695/ajtm.2021.14.3.4 (Original work published December 28, 2021)
Download Citation
Endnote/Zotero/Mendeley (RIS)
BibTeX

References

  1. Alfaro, L., Chari, A., Greenland, A., & Schott, P. (2020). Aggregate and Firm-Level Stock Returns During Pandemics, in Real Time (No. 26950). doi: 10.3386/w26950
  2. Anh, D. L. T., & Gan, C. (2021). The impact of the COVID-19 lockdown on stock market performance: evidence from Vietnam. Journal of Economic Studies, 48(4), 836–851. doi: 10.1108/JES-06-2020-0312
  3. Anwar, M. C. (2020, April 7). Catat! Ini 8 Sektor yang Diizinkan Anies Beroperasi Saat PSBB. CNBC Indonesia. https://www.cnbcindonesia.com/news/20200408102241-4-150513/catat-ini-8-sektor-yang-diizinkan-anies-beroperasi-saat-psbb
  4. Atahau, A. D. R., & Cronje, T. (2021). What drives the performance of different bank-ownership types in Indonesia? The pre- and post-GFC analysis. International Journal of Productivity and Performance Management, ahead-of-print(ahead-of-print). doi: 10.1108/IJPPM-03-2020-0096
  5. Badan Pusat Statistik. (2020). Analisis Hasil Survei Dampak Covid-19 Terhadap Pelaku Usaha.
  6. Cejnek, G., Randl, O., & Zechner, J. (2020). The COVID-19 Pandemic and Corporate Dividend Policy. SSRN Electronic Journal. doi: 10.2139/ssrn.3576967
  7. Cho, B., & Saki, Z. (2021). Firm performance under the COVID-19 pandemic: The case of the U.S. textile and apparel industry. The Journal of The Textile Institute. https://doi.org/10.1080/00405000.2021.1943258
  8. Clark, J., Mauck, N., & Pruitt, S. W. (2021). The financial impact of COVID-19: Evidence from an event study of global hospitality firms. Research in International Business and Finance, 58. doi: 10.1016/j.ribaf.2021.101452
  9. Duan, Y., & Niu, J. (2020). Liquidity creation and bank profitability. The North American Journal of Economics and Finance, 54, 101250. doi: 10.1016/j.najef.2020.101250
  10. Erfani, G., & Vasigh, B. (2018). The impact of the global financial crisis on profitability of the banking industry: A comparative analysis. Economies, 6(4). doi: 10.3390/economies6040066
  11. Fredriksson, A., & O liveira, G. M. de. (2019). Impact evaluation using Difference-in-Differences. RAUSP Management Journal, 54(4). doi: 10.1108/RAUSP-05-2019-0112
  12. Hasan, N. A., Heal, R. D., Bashar, A., Bablee, A. L., & Haque, M. M. (2021). Impacts of COVID-19 on the finfish aquaculture industry of Bangladesh: A case study. Marine Policy, 130. doi: 10.1016/j.marpol.2021.104577
  13. Hotchkiss, E. S., Nini, G., & Smith, D. C. (2020). Corporate Capital Raising During the COVID Crisis. SSRN Electronic Journal. doi: 10.2139/ssrn.3723001
  14. Hu, S., & Zhang, Y. (2021). COVID-19 pandemic and firm performance: Cross-country evidence. International Review of Economics & Finance, 74. doi: 10.1016/j.iref.2021.03.016
  15. Huang, H., & Ye, Y. (2021). Rethinking capital structure decision and corporate social responsibility in response to COVID‐19. Accounting & Finance. doi: 10.1111/acfi.12740
  16. Husain, A., & Abdulla, Y. (2020, November 8). Payout Decision pre- and during COVID-19: Evidence from Bahrain. 2020 International Conference on Decision Aid Sciences and Application (DASA). doi: 10.1109/DASA51403.2020.9317115
  17. Khatib, S. F. A., & Nour, A.-N. I. (2021). The Impact of Corporate Governance on Firm Performance During The COVID-19 Pandemic: Evidence from Malaysia. Journal of Asian Finance, Economics and Business, 8(2), 943–952.
  18. Krieger, K., Mauck, N., & Pruitt, S. W. (2020). The impact of the COVID-19 pandemic on dividends. Finance Research Letters. doi: 10.1016/j.frl.2020.101910
  19. Lai, H. Y., Aziz, A. R. A., & Chan, T. K. (2014). Effect of the global financial crisis on the financial performance of public listed construction companies in Malaysia. Journal of Financial Management of Property and Construction, 19(3), 246–263. doi: 10.1108/JFMPC-02-2014-0002
  20. Pettenuzzo, D., Sabbatucci, R., & Timmermann, A. (2021). How to Outlast a Pandemic: Corporate Payout Policy and Capital Structure Decisions During COVID-19. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.3823258
  21. Qin, X., Huang, G., Shen, H., & Fu, M. (2020). COVID-19 pandemic and firm-level cash holding—Moderating effect of goodwill and goodwill impairment. Emerging Markets Finance and Trade, 56(10), 2243–2258. doi: 10.1080/1540496X.2020.1785864
  22. Rababah, A., Al‐Haddad, L., Sial, M. S., Chunmei, Z., & Cherian, J. (2020). Analyzing the effects of COVID‐19 pandemic on the financial performance of Chinese listed companies. Journal of Public Affairs. https://doi.org/10.1002/pa.2440
  23. Sharma, A., Adhikary, A., & Borah, S. B. (2020). Covid-19′s impact on supply chain decisions: Strategic insights from NASDAQ 100 firms using Twitter data. Journal of Business Research, 117. doi: 10.1016/j.jbusres.2020.05.035
  24. Shen, H., Fu, M., Pan, H., Yu, Z., & Chen, Y. (2020). The Impact of the COVID-19 Pandemic on Firm Performance. Emerging Markets Finance and Trade, 56(10). doi: 10.1080/1540496X.2020.1785863
  25. Wahyudi, E. (2020, July 14). PHRI: Sektor Pariwisata Rugi Rp 85,7 Triliun Akibat Pandemi - Bisnis Tempo.co. Tempo. https://bisnis.tempo.co/read/1365055/phri-sektor-pariwisata-rugi-rp-857-triliun-akibat-pandemi/full&view=ok