The Influence of Macroeconomic Factors on Financial Distress of Companies in Asean: an Analysis of SDG Implications

Objective: This study aims to analyze the influence of macroeconomic factors, namely gross domestic product growth, inflation, interest rates, and the exchange rate of the US dollar on the financial distress of companies going public in ASEAN countries. Theoretical Framework: gross domestic product has a negative effect on financial distress, while inflation, interest rates, and the US dollar exchange rate have a positive effect on it. Market as a control variable negatively affects financial distress. Method: This study uses a sample of 3,285 nonfinancial-going public companies in ASEAN countries from 2009 to 2023 (15 years). This study uses secondary data, in the form of data on the company's annual financial statements. Results and Discussion: The findings reveal that high inflation and interest rates significantly contribute to financial distress, aligning with the Sustainable Development Goals (SDGs) aimed at fostering economic stability and resilience. This study's results indicate that, both collectively and by nation, Gross Domestic Product (GDP) growth positively and significantly affects the financial distress of publicly listed companies in ASEAN. The inflation and interest rates, both collectively within ASEAN and individually by country, exert a negative and significant influence on the financial distress of publicly listed companies in the region. The exchange rate of the US dollar, both in ASEAN as a whole and in nations other than Vietnam, adversely and significantly affects the financial distress of publicly listed companies in ASEAN. Finally, the market, as a control variable, has a positive and significant effect on the financial distress of publicly listed firms in ASEAN, both collectively and per nation, with the exception of Singapore. Research Implications: The limitations of this study lie in the use of macroeconomic factors to examine their influence on financial distress in publicly listed companies in ASEAN. This study is also restricted to non-financial publicly listed companies. While this research provides valuable insights into the impact of macroeconomic factors on financial distress, it is important to acknowledge its limitations and consider the practical implications for various stakeholders. Originality/Value: The results of this study not only back up what other research has found, but they also help us learn more about how macroeconomic factors, including GDP growth, inflation rate, interest rate, US dollar exchange rate, and capital market conditions, affect firms' finances. This study's novelty is rooted in its comparative approach to analyze data from different ASEAN countries, which provides greater insight into how macroeconomic factors play a role in different contexts.