Does Corporate Governance Affect the Financial Distress of Indonesian Company? A Survival Analysis Using Cox Hazard Model with Time-Dependent Covariates

Financial distress is a condition in which a company is potential unable to fulfill its obligations. The survivability of a company is determined by many factors. This study investigated several of those factors i.e., corporate governance and financial ratios from the companies listed in capital market. The study utilizes purposive random sampling coverage the year 2002-2014. Estimation method using Cox proportional hazards regressions showed that board size, board independence, leverage, size, liquidity and return on asset had a impact on the survival likelihood of the financial distress. This findings was, therefore, in line with the Agency Theory.