Abstract:

The main purpose of this research is to identify the impact of interest rate volatility and liquidity on corporate bond yield spread in Indonesia. Several researchers have done research about corporate liquidity by using Chen, Liao & Tsai model [4], and Kim & Stock journal [15] for researches about the current interest rate. In Chen, Liao & Tsai journal [4], the corporate liquiditiy is expected to give impact to the yield spread. Uncertain situation in the company will affect the corporate liquidity. According to Kim & Stock [15], the interest rate is expected to influence to the corporate bond yield spread. This research use 18 sample within 2015-2017 time periode. Researcher uses Ordinary Least Square, so that there is a consistent result of the theory but there is a different result from the theory used. In this research, the following control variables are added: coupon, leverage, logarithm of the rupiah amount of the bond issued, rating, bid-ask proportional and maturity.