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Bulletin of Monetary Economics and Banking

Authors

Wydia Andry

Document Type

Article

Abstract

The current paper analyze the prediction of the obligation rating and how they are ditermined. Unlike the previous studies, we include both the accounting and the non-accounting factors, and test the explanatory power of the following six variables: (1) the growth , (2) the size (3) the sinking fund, (4) the risk (with or without guarantee), (5) the maturity structure and, (6) the auditor’s judgement.The data consists of the bank and the financial firms listed in Jakarta Stock Exchange and Surabaya Stock Exchange. As the endogenous variable is discrete, we apply the probit regression model on the data and test how the six exogenous variable above can influence the rating of obligation. The results indicates that in general, the obligation of Indonesian firms are investment grade. The study also conform the significance of the growth, the sinking fund, the maturity and the auditor, while the size and the risk are both insignificant to predict the rating of obligation.Key words: : Rating obligation, growth, size, sinking fund, risk, maturity, logif regression.JEL Classification: E43, E44, G11

First Page

243

Last Page

262

Creative Commons License

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

Country

Indonesia

Affiliation

Bank Indonesia

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