Does Democratization Promote Competition? Evidence from Indonesia

2021 ◽  
Author(s):  
Mary Hallward-Driemeier ◽  
Anna Kochanova ◽  
Bob Rijkers
Keyword(s):  
Market Share ◽  
Family Firms ◽  
Manufacturing Industries ◽  
Political Connections ◽  
Competitive Effect ◽  
Economic Competition

Abstract Does democratization promote economic competition? This paper documents that the disruption of political connections associated with Suharto's fall had a modest pro-competitive effect on Indonesian manufacturing industries. Firms with connections to Suharto lost substantial market share following his resignation. Industries in which Suharto family firms had larger market share during his tenure exhibited weak improvements in broader measures of competition in the post-Suharto era relative to industries in which Suharto firms had not been important players.

scholarly journals FAMILY FIRMS, POLITICAL CONNECTIONS, AND MANAGERIAL SHORT-TERMISM

2020 ◽  
pp. 186-202
Author(s):  
Iman Harymawan ◽  
Amalia Rizki ◽  
Mohammad Nasih ◽  
Amalia Kusuma Dewi
Keyword(s):  
Family Firms ◽  
Political Connections ◽  
Short Termism

scholarly journals Do Political Connections Affect the Conservative Financial Reporting of Family Firms?

2019 ◽  
Vol 11 (20) ◽  
pp. 5563
Author(s):  
Hsin-Yi Chi ◽  
Tzu-Ching Weng ◽  
Guang-Zheng Chen ◽  
Shu-Ping Chen
Keyword(s):  
Financial Reporting ◽  
Family Firms ◽  
Political Connections ◽  
Policy Makers ◽  
Listed Firms ◽  
Reporting Incentives ◽  
Final Sample ◽  
The Family ◽  
Governance Practice ◽  
Using Data

This paper investigates the effect of political connections on the association between family firms and conservative financial reporting. While family firms have incentives to reduce agency and litigation-related costs by means of conservative reporting, firms with political connections tend to have opaque financial reporting, which enable them to engage in rent-seeking activities. Using data for Taiwanese listed firms between 1996 and 2012, the final sample observations were 13,877 firm-year observations from a population of 21,393 firm-year observations. We found that political connections weaken the positive relationship between family ownership and conservative financial reporting. This suggests that politically connected family firms make fewer demands for conservative financial reporting. This study contributes to the literature on how political connections affect the family owners’ reporting incentives. Policy makers may consider political connections as an essential factor with respect to establishing governance practice in family firms.

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

2019 ◽  
Vol 7 (4) ◽  
pp. 55 ◽  
Author(s):  
Iman Harymawan ◽  
Mohammad Nasih ◽  
Muhammad Madyan ◽  
Diarany Sucahyati
Keyword(s):  
Family Firms ◽  
Stock Exchange ◽  
Least Square ◽  
Political Connections ◽  
Family Ownership ◽  
Ols Regression ◽  
Ordinary Least Square ◽  
Relationship Of ◽  
The Relationship

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.

Family firms, political connections and audit fees: evidence from Malaysian firms

2018 ◽  
Vol 33 (6/7) ◽  
pp. 613-632 ◽  
Author(s):  
Chwee Ming Tee
Keyword(s):  
Family Firms ◽  
Audit Fees ◽  
Emerging Economy ◽  
Political Connections ◽  
Advanced Economy ◽  
Content Type ◽  
Self Selection ◽  
Institutional Feature

Purpose The purpose of this study is to examine the association between family firms and audit fees in an emerging economy setting. As family firms either face Type 1 or Type 2 agency problem, it seeks to gain a better understanding on family firms in an emerging economy such as Malaysia. Additionally, this study introduces political connections to investigate whether it can moderate the association between family firms and audit fees. Political connection is chosen as an important institutional feature because of its many and well-documented politically connected firms and pervasive political patronage system in Malaysia. Design/methodology/approach Based on a dataset of 750 firms or 7,848 firm-year observations from 2002 till 2015, panel regression analysis is used to investigate the research questions. As a robustness test, Heckman’s self-selection model is used to deal with the self-selection problem. Findings The results reveal that family firms are associated with higher audit fees, indicating that Type 2 dominates Type 1 agency problems in Malaysia. This positive relationship is stronger in family firms which are older and have higher family controlling shareholding. Further, the association is exacerbated if it is also connected to the ruling elite. Originality/value This study contributes to the literature by showing that institutional feature such as family firms and political connections can produce different firm outcomes between emerging and advanced economy, particularly in auditing. This study responds to calls for more research on auditing in family firms, particularly in emerging economy.

scholarly journals Empirical testing of Kotler's high-performance factors to increase sales growth

2010 ◽  
Vol 10 (1) ◽  
Author(s):  
Oren Dayan ◽  
Cecil A. Arnolds ◽  
Miemie Struwig
Keyword(s):  
Market Share ◽  
High Performance ◽  
Distribution Channel ◽  
High Technology ◽  
Organisational Culture ◽  
Marketing Strategies ◽  
Performance Model ◽  
Manufacturing Industries ◽  
Generic Model ◽  
Sales Growth

Purpose and/or objectives: The primary objective of this study is to empirically test Kotler's (2003) high-performance model which ensures an increase in sales growth. More specifically, the study explores the influence of process variables (as measured by marketing strategies), resources management (as measured by the management of labour, materials, machines, information technology and energy) and organisational variables (as measured by TQM and organisational culture) on sales growth in the food, motorcar and high-technology manufacturing industries. Problem investigated Various research studies suggest that the managers of firms are continuously challenged in their attempts to increase their sales (Morre, 2007; Pauwels, Silva Risso, Srinivasan & Hanssens, 2004: 142-143; Gray & Hayes, 2007: 1). Kotler (2003) suggests a model that leads to a high performing business. The question is posed as to whether this model can be used to increase sales growth in all businesses. This study seeks to develop a generic model to increase sales growth across industries by using an adapted version of Kotler's (2003) high-performance model. The study investigates the application of this adapted model on the food, motorcar and high-technology manufacturing industries. Design and/or methodology and/or approach: An empirical causal research design that includes 770 marketing and product development practitioners from multinational food, motorcar and high-technology manufacturing firms, was used in this study. A response rate of 76.1% was achieved as only 571 useable questionnaires were returned. The internal reliability and discriminant validity of the measuring instrument were assessed by the calculation of Cronbach alpha coefficients and the conducting an exploratory factor analysis respectively. Structural Equation Modelling SEM) was used to statistically test the relationships between the independent variables (marketing strategies, resource management, TQM and organisational culture) and the dependent variable (sales growth). Findings and/or implications: As the achievement of increased sales, profits and market share is important to all industries, companies spend large amounts of money on research and development to increase sales and market share. The study's empirical results lead to a proposed model that shows the factors influencing sales growth. These factors include distribution channel development, third-party agreements, e-business, e-savings and a market-oriented organisational culture.

scholarly journals The long-term effect of competition on public school achievement: Evidence from the Indiana choice scholarship program

2021 ◽  
Vol 29 ◽  
pp. 97
Author(s):  
Yusuf Canbolat
Keyword(s):  
Public Schools ◽  
Public School ◽  
Market Share ◽  
Private School ◽  
Fixed Effects ◽  
School Achievement ◽  
School Vouchers ◽  
Competitive Effect ◽  
Scholarship Program

Despite a vast literature on school vouchers, less is known about their long-term competitive effects on public schools. The current paper examines the competitive effect of the Indiana Choice Scholarship Program, the largest single voucher program in the US, on math and ELA proficiency rates in public schools in the last eight years. Exploiting school vouchers' market share as the primary measure of competition, I use two-way fixed effects regression and event study framework to examine the competitive effect. Results indicate that, although competition has a positive effect in the earlier years, it is detrimental in the long term, suggesting that the program created a “voucher shock” that led to an improvement in the short term. However, in the long term, the proficiency rates in public schools that faced higher competition fell and never increased again. The trend of voucher recipients who have prior public-school attendance revealed that the worsening proficiency rates in the public schools that face higher competition were driven by the departure of relatively high achieving students, suggesting that school vouchers inspire sorting. The results are robust to alternative specifications that use the variation in the interaction between the market share of vouchers and geospatial measures of private school density. 

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