The Role of Political Connections on Family Firms’ Performance: Evidence from Indonesia

Iman Harymawan and Mohammad Nasih and Muhammad Madyan and Diarany Sucahyati (2019) The Role of Political Connections on Family Firms’ Performance: Evidence from Indonesia. International Journal of Financial Studies, 7 (55). pp. 1-14. ISSN 2227-7072

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Official URL: https://www.mdpi.com/journal/ijfs

Abstract

The purpose of this study is to investigate the relationship of firms with family ownership and their performance in Indonesia and further examine on how political connections affect this relationship. This study used 933 samples from 413 companies listed on the Indonesia Stock Exchange (IDX) in the period between 2014 and 2016. Using ordinary least square (OLS) regression, the results shows that firms without family ownership (non-family firms) have better performance than firms with family ownership (family firms) in Indonesia. Furthermore, the findings also show that the performance of family firms significantly improve when the firms are affiliated with political connections. Our findings imply that establishing political connections in family firms will increase the performance of the firms.

Item Type: Article
Uncontrolled Keywords: family firms; political connections; firm performance; emerging countries
Subjects: H Social Sciences > HG Finance > HG1-9999 Finance
H Social Sciences > HG Finance > HG4001-4285 Finance management. Business finance.Corporation finance
H Social Sciences > HG Finance > HG4501-6051 Investment, capital formation, speculation > HG4551-4598 Stock exchanges
J Political Science > JZ International relations > JZ5-6530 International relations > JZ4835-5490 International organizations and associations > JZ4841-4848 Political non governmental organizations. NGOs
Divisions: 04. Fakultas Ekonomi dan Bisnis > Manajemen
Creators:
CreatorsNIM/NIDN
Iman HarymawanUNSPECIFIED
Mohammad NasihNIDN0006086503
Muhammad MadyanNIDN0004017104
Diarany SucahyatiUNSPECIFIED
Depositing User: Tn Sugeng Riyanto
Date Deposited: 19 Nov 2019 03:21
Last Modified: 13 Dec 2019 08:31
URI: http://repository.unair.ac.id/id/eprint/91078
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