Title
Political connection, blockholder ownership and performance
Abstract
This paper aims to examine the effect of blockholder of political connected firm on the performance of conglomerates. The sample of this paper is all 66 conglomerates listed on the Indonesia Stock Exchange from 2006 to 2014. Regression panel data with General Least Square was used for this analysis. It was found that Family and state blockholder have positive and significant effect on firm value at all cut off (10%-50%), political connections in the family, state, and public blockholder have significant positive effect on firm value. The result of this paper indicates that the structure of companies’ ownership has contribution to determine the political connections in the conglomerates. The concentration of ownership in the company and family as controlling highest conglomerate in Indonesia as well as their involvement in politics implies that Indonesia has fallen into oligarchy state, in which the rules are held by a group of wealthy political elites.
Keywords
firm value, political connection, blockholder, Indonesia
JEL classifications
M40 , M41 , M49
URI
http://jssidoi.org/jesi/article/353
DOI
Pages
52-68
Funding
This research was supported by Directorate of General for Strengthening Research and Development, the Ministry of Research and Technology Republic Indonesia, Higher Education (DIKTI) for providing Doctoral Scholarship and Sekolah Tinggi Ilmu Ekonomi Muhammadiyah Jakarta Indonesia.This is an open access issue and all published articles are licensed under a
Creative Commons Attribution 4.0 International License
RSS 1.0
