The Effect of Debt on Firm Performance During Covid-19 Pandemic Crisis Period

Abstract

This research was conducted to examine the effect of using debt on firm performance within non-financial companies listed on the Indonesia Stock Exchange during the Covid-19 pandemic crisis period. This study uses a quantitative approach through multiple linear regression analysis. The dependent variable for firm performance is measured by Tobin's Q and ROA. The independent variables used for this study are short term debt and long term debt. Whilst the control variables are sales growth, firm size, tangibility, paid dividends, and cash flow. This study examines 1,230 secondary observation data from 410 companies over a period of 3 years. The regression will be divided into 2 periods, the normal period and the lagged period. This study shows that debt has a significant positive impact on Tobin's Q. Nevertheless, debt has an insignificant negative effect on short term debt and significant negative for long-term debt on ROA. The results difference can be explained by testing the lagged period which proves that Tobin's Q is more robust than ROA. Thus, it can be recapitulated that debt has ...