Does firm size moderate the factors of financial distress? Evidence from industrial companies

Download This Article

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

Abstract

Economic uncertainty will cause financial problems in the business sector that can affect the country’s financial condition. This study aims to increase understanding of how to mitigate the risk of financial distress and explore the impact of firm size in managing financial distress. The research on 43 companies in the good industry sector of the Indonesian Stock Exchange (IDX) for 2020–2024. The analysis techniques used are inner and outer model structural. The empirical research finds that corporate social responsibility (CSR), intellectual capital, and operational capacity have a significant negative financial distress. This finding implies that CSR disclosure can support the company’s business sustainability. The research investigation evidence that big firm size can support operating capacity in mitigating financial distress. The contribution of this research is important for the government in protecting investors with regulatory arrangements. The empirical literature highlights that the causes of financial distress in firms are often related to problems with their financial ratios.

Keywords: Corporate Social Responsibility, Intellectual Capital, Operating Capacity, Financial Distress, Firm Size

Authors’ individual contribution: Conceptualization — W.; Methodology — N.A.B.; Investigation — W., N.A.B., and F.K. Writing — W., N.A.B.; Supervision — W.; Project Administration — F.K.; Funding Acquisition — W.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: M14, M21, M41

Received: 20.04.2025
Revised: 15.07.2025; 06.08.2025; 31.12.2025
Accepted: 06.01.2026
Published online: 08.01.2026

How to cite this paper: Winarsih, Najmuddin, A. B., & Fuad, K. (2026). Does firm size moderate the factors of financial distress? Evidence from industrial companies. Corporate and Business Strategy Review, 7(1), 67–77. https://doi.org/10.22495/cbsrv7i1art6