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Entrepreneurship and Sustainability Issues Open Access Q1
Scopus - coverage starting with 2017 material
Received: 2019-02-27  |  Accepted: 2019-06-30  |  Published: 2019-09-30

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

Authors

Wati, Lela Nurlaela
STIE Muhammadiyah Jakarta, Jakarta, Indonesia https://stiemj.ac.id
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Primiana, Hj. Ina
Padjadjaran University, Sumedang, Indonesia http://www.unpad.ac.id
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Pirzada, Kashan
University Utara Malaysia, Changlun, Malaysia http://www.uum.edu.my
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Sudarsono, Rachmat
Padjadjaran University, Sumedang, Indonesia http://www.unpad.ac.id
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Journal title

Entrepreneurship and Sustainability Issues

Volume

7


Number

1


Issue date

September 2019


Issue DOI


ISSN

ISSN 2345-0282 (online)


Publisher

VšĮ Entrepreneurship and Sustainability Center, Vilnius, Lithuania

Cited

Google Scholar

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References