Analysis of The Impact of Political Connections and Ownership Structure on Corporate Performance (A Study on Companies Listed on BEI 2015-2019)
##plugins.themes.EpsilonTheme.article.main##
Fadia Zen
Achmad Murdiono*
Lulu Nurul Istanti
Deni Bagas Pradana
Siska Krisdiana Nofianti
The aim of this study is to understand the differences in the impact of government and political connections, considering various ownership structures, leverage, and company size, on corporate performance. Focusing on political connections during the Jokowi regime, we analyze based on 2843 observations of companies listed in Indonesia. Additionally, we use OLS regression and address endogeneity problems with Robust Standard Error, resulting in new regression outcomes free from endogeneity issues. Our findings indicate that in the Jokowi regime, political connections significantly enhance corporate performance. Furthermore, the business landscape in Indonesia is dominated by conglomerates, family-owned businesses, and politicians. These findings can assist regulators and standard setters in considering future ownership structures, especially in state-owned enterprises, tender restrictions, and good corporate governance supervision, helping to devise the best strategies to improve welfare and reduce the excessive control of conglomerates in Indonesia. Instead of incremental work, this study focuses on corporate performance from a broader dimension of political connections, also examining the influence of other variables central to numerous research studies.
Belsley, D. A., Kuh, E., & Welsch, R. E. (2005). Regression diagnostics: Identifying influential data and sources of collinearity. John Wiley & Sons.
Brigham, E. F., Joel, F., & Houston. (2004). Dasar-dasar manajemen keuangan. In Erlangga, Jakarta.
Bushman, R. M., Piotroski, J. D., & Smith, A. J. (2004). What determines corporate transparency? Journal of Accounting Research, 42(2), 207–252.
Faccio, M. (2006). Politically connected firms. American Economic Review, 96(1), 369–386.
Ghozali, I. (2013). Aplikasi Analisis Multivariat dengan Program IBM SPSS. Edisi 7. Semarang: Penerbit Universitas Diponegoro.
Harjito, A., & Martono. (2011). Manajemen Keuangan (2nd, Cetakan ed.). Ekonisia.
Harrison, J. S., & Wicks, A. C. (2013). Stakeholder theory, value, and firm performance. Business Ethics Quarterly, 23(1), 97–124.
Hill, M. D., Kelly, G. W., Lockhart, G. B., & Van Ness, R. A. (2013). Determinants and effects of corporate lobbying. Financial Management, 42(4), 931–957.
Hillman, A. J., Withers, M. C., & Collins, B. J. (2009). Resource dependence theory: A review. Journal of Management, 35(6), 1404–1427.
Kenton, W. (2019). Company. https://www.investopedia.com/ terms/c/company.asp
Litz, B. T. (2004). Early intervention for trauma and traumatic loss. Guilford Press.
Mallin, C. (2004). Corporate Governance. In Oxford University Press (Vol. 21).
Maulida, D., Sausan, H., Nazhira, S., & Manan, F. (2023). Pelaksanaan Desentralisasi dan Good Governance Kabupaten Malang di Desa Ngadas. Epistemik: Indonesian Journal of Social and Political Science, 4(2), 14–26.
Meckling, W. H., & Jensen, M. C. (1976). Theory of the Firm. Managerial Behavior, Agency Costs and Ownership Structure.
Meredith, M. (2013). Heterogeneous friends-and-neighbors voting. University of Pennsylvania Mimeo.
Perry, E. J., & Goldman, M. (2009). Grassroots political reform in contemporary China (Vol. 14). Harvard University Press.
Pfeffer, J., & Salancik, G. R. (1978). The external control. New York.
Rusmin, R., Evans, J., & Hossain, M. (2012). Ownership structure, political connection and firm performance: Evidence from Indonesia. Corporate Ownership and Control, 10(1), 434–443.
Wardoyo, & Veronica, T. M. (2013). Pengaruh good corporate governance, corporate social responsibility & kinerja keuangan terhadap nilai perusahaan. JDM (Jurnal Dinamika Manajemen), 4(2), 132–149.
Wijaya, L. R. P., & Wibawa, B. A. (2010). Pengaruh Keputusan Investasi. Keputusan Pendanaan, Kebijakan Dividen Terhadap Nilai Perusahaan, Simposium Nasional Akuntansi XIII, Purwokerto, Juni, 39–60.
Zudenkova, G. (2011). A political agency model of coattail voting. Journal of Public Economics, 95(11–12), 1652–1660.
