The Influence of Entrepreneurs’ Political Connections on Enterprise Innovation Intention

2020 ◽  
Vol 17 (03) ◽  
pp. 2050020
Author(s):  
Yi Su ◽  
Xue Wang
Keyword(s):  
Stock Exchange ◽  
Market Competition ◽  
Negative Influence ◽  
Mediation Effect ◽  
Political Connections ◽  
Political Connection ◽  
Differentiation Strategy ◽  
Survival And Development ◽  
Enterprise Innovation ◽  
The Government

Based on the data of the Growth Enterprise Market (GEM)-listed companies in the Shenzhen Stock Exchange of China, this paper researched the influence mechanism of political connections on enterprise innovation intention. This paper is based on the theory of reciprocal exchange of social capital. The research found that the entrepreneur’s political connections are detrimental to the improvement of enterprise innovation intention, and the differentiation strategy has a mediation effect between them. Moreover, the market competition intensity of enterprise production adjusts the influence of the differentiation strategy on enterprise innovation intention, and it can alleviate the negative influence of the political connection on the innovation intention through the differentiation strategy. Although the country’s innovation-driven strategy will provide more innovative resources for enterprises, securing the survival and development of an enterprise is becoming increasingly narrower by relying solely on establishing connections with the government.

scholarly journals POLITICAL CONNECTION, FAMILY OWNERSHIP, AND EARNINGS MANAGEMENT IN MANUFACTURING COMPANIES IN INDONESIA

2021 ◽  
Vol 19 (3) ◽  
pp. 585-593
Author(s):  
Enni Savitri ◽  
Keyword(s):  
Earnings Management ◽  
Management Practices ◽  
Stock Exchange ◽  
Political Connections ◽  
Family Ownership ◽  
Political Connection ◽  
Manufacturing Companies ◽  
Control Rights ◽  
Political Relationship ◽  
The Government

Political connections have an essential role in the earnings management strategy. Political connections can influence earnings management practices. The research aimed to analyze the effect of politics and family ownership on earnings management practices. The sample is 92 manufacturing companies listed on the Indonesia Stock Exchange for the period 2016-2019. Methods of data using a purposive sampling method. Multiple linear regression is an analytical tool used to test the hypothesis. The results show that political connections influence profits. The company pays more attention to the company’s reputation and maintains the privileges of the political relationship that has existed between the company and the government. Family ownership affects earnings management. Family ownership has control rights that can be used to influence management in company profits. The novelty of this research is that political connections can influence earnings management.

scholarly journals Regional Anti-Corruption and CSR Disclosure in a Transition Economy: The Contingent Effects of Ownership and Political Connection

2019 ◽  
Vol 11 (9) ◽  
pp. 2499 ◽  
Author(s):  
Shiwei Xu ◽  
Mingzhe Qiao ◽  
Bin Che ◽  
Peng Tong
Keyword(s):  
Transition Economy ◽  
Market Competition ◽  
Organizational Legitimacy ◽  
Political Connections ◽  
Political Connection ◽  
Socially Responsible ◽  
The Government ◽  
Csr Disclosure ◽  
The Impact ◽  
Positive Effect

Based on the empirical data of China’s Shanghai and Shenzhen A-share market, this paper examined the impact of regional anti-corruption intensity on corporate social responsibility (CSR) disclosure. The results indicate that (1) regional anti-corruption intensity has a significant positive effect on firms’ CSR disclosure; (2) through the grouping test based on the ownership of firms, it was found that the positive effect of anti-corruption intensity on CSR disclosure in the sample of non-state-owned enterprises was more significant and positive than that of state-owned enterprises (SOEs); and (3) through the grouping test of whether or not the enterprises had political connections, the positive effect of regional anti-corruption intensity on CSR disclosure was stronger and more significant in firms with political connections (relative to those with no or weak political connections). This paper sheds light on the research into anti-corruption policies by linking government macro policy and enterprises’ micro social economic behaviors, and it provides empirical evidence for this linkage. This paper also contributes to organizational legitimacy theory and CSR theory by probing the impact of anti-corruption policies on firms’ CSR disclosure. At the same time, the effects of two contingency factors (ownership and political connection) also provide some practical implications to the relevant government departments by: (1) speeding up the market-oriented reform of state-owned enterprises including clarifying the boundaries of authority and responsibility between SOEs and the government, and conducting the de-administration of managers of SOEs; and (2) encouraging firms to focus on market competition and be more socially responsible, instead of speculating with political rents.

scholarly journals Too much reciprocity?

2020 ◽  
Vol 14 (2) ◽  
pp. 473-491
Author(s):  
Zhe Sun ◽  
Qi Ai
Keyword(s):  
Social Exchange ◽  
Social Exchange Theory ◽  
Emerging Market ◽  
Chief Executive ◽  
Political Connections ◽  
Political Connection ◽  
Content Type ◽  
Chinese Multinationals ◽  
The Government ◽  
The Impact

Purpose Using the evidence of Chinese outbound mergers and acquisitions (M&As) enacted between 2006 and 2014, this study aims to investigate the role played by home political connections on the cost implications of Chinese multinationals. It also examines whether home political connections – at different levels and of different configurations – impact the operational cost of Chinese multinationals. Design/methodology/approach The data were analysed using a multivariate regression model. To examine their heterogeneous effect on Chinese multinationals, the political connection data were further split into higher and lower level political connections and in chief executive officer (CEO) and chairperson political connections. Findings This study implies the negative effect of home political connections on the internationalisation of Chinese multinationals. At the same time, the impact of lower-level political connections is stronger than that of their higher-level counterparts. Moreover, CEO political connections have a stronger effect on the operational costs of Chinese multinationals than their Chairperson equivalents. Originality/value By unravelling the “black box” of Chinese internationalisation from the social exchange perspective, through the informal political connection networking ties between Chinese firms and the government, this study advances emerging market multinational theory, contributes to the understanding of the heterogeneous nature of political connections and sheds new light on social exchange theory from the perspective of the emerging phenomenon of Chinese internationalisation.

scholarly journals The effect of related party transactions on firm performance: the moderating role of political connection in indonesian banking

2019 ◽  
Vol 20 ◽  
pp. 81-92 ◽  
Author(s):  
Mr Supatmi ◽  
T. Sutrisno ◽  
Erwin Saraswati ◽  
Bambang Purnomosidhi
Keyword(s):  
Panel Data ◽  
Stock Exchange ◽  
Market Performance ◽  
Political Connections ◽  
Political Connection ◽  
Limited Information ◽  
Related Party Transactions ◽  
Macroeconomic Conditions ◽  
Panel Data Regression ◽  
Data Regression

This study aims to examine the effect of related party transactions (RPTs) on banks’ performance and investigates political connections as moderator in their causal relationship. Our sample is 40 Indonesian banks listed on the Indonesian Stock Exchange for the years 2013–2016 with 160 observations as panel data. Based on panel data regression test, our results demonstrate that account receivables-related RPTs have a positive effect on banks’ profitability and its market performance (Tobin’s Q), but there are consequences of high operating costs and the risk of non-performing loans. Banks receive more funds from their related parties (account payables-related RPTs), banks exhibit higher capital capability and lower market performance. Further, the political connection index in banks significantly affect banks’ capability, liquidity, efficiency, and market value through RPTs. This result indicates that political connection strengthens the effects of RPTs on banks’ performance. Although this study has limited information in determining political connections and has not considered macroeconomic conditions, these findings imply that political connection plays an important role in banks’ performance in Indonesia.

scholarly journals Pengaruh Koneksi Politik terhadap Nilai Perusahaan

2020 ◽  
Vol 30 (6) ◽  
pp. 1550
Author(s):  
Winny Evalestine Patriarini
Keyword(s):  
Regression Analysis ◽  
Multiple Regression Analysis ◽  
Multiple Regression ◽  
Firm Value ◽  
Stock Exchange ◽  
Political Connections ◽  
The Political ◽  
Political Connection ◽  
Analysis Model ◽  
A Company

The purpose of this study is to analyze the effect of political connection on firm value. This study uses 160 samples listed on the Indonesia Stock Exchange for the period 2014 to 2018. The analysis used in this study is the Multiple Regression analysis model that is processed with SPSS 20 software. This study found that political connections had a positive and significant effect on firm value. The results show that the political connections that a company has can cause a company to have an advantage so that it can increase the value of the company. Keywords: Political Connection; Firm Value.

Political connections and firm value: an analysis of listed firms in Sri Lanka

2016 ◽  
Vol 28 (1) ◽  
pp. 92-106 ◽  
Author(s):  
Henk Berkman ◽  
Vidura Galpoththage
Keyword(s):  
Sri Lanka ◽  
Firm Value ◽  
Public Perception ◽  
Convincing Evidence ◽  
Political Connections ◽  
Political Connection ◽  
Content Type ◽  
Political Events ◽  
The Government ◽  
The Impact

Purpose – The purpose of this study is to use a portfolio-time-series approach to examine the impact of five important political events on the value of politically connected firms in Sri Lanka. Design/methodology/approach – This study examines five major political events to test if political connections affect market value of listed companies in Sri Lanka. Results show that despite numerous news articles and public perception suggesting otherwise, there is no convincing evidence which indicate that political connections increase firm value in Sri Lanka. Findings – The empirical results provide no evidence that political connections increase firm value in Sri Lanka. Further tests indicate that the government is not biased towards politically connected firms when granting major projects. The authors also fail to find a relation between Tobin’s Q and the level of political connection after including several common control variables. Originality/value – This study contributes to the literature on the value of political connections by using a robust event study methodology and a novel setting: Sri Lanka in the period around the end of the civil war.

Institutional environment, political connections of partial state ownership, and performance

2016 ◽  
Vol 43 (8) ◽  
pp. 856-870 ◽  
Author(s):  
Zengji Song ◽  
Abraham Nahm ◽  
Jun Yang
Keyword(s):  
Institutional Environment ◽  
State Ownership ◽  
Economic Consequences ◽  
Political Connections ◽  
Political Connection ◽  
Data Set ◽  
Content Type ◽  
Partial State ◽  
The Government ◽  
And Performance

Purpose – The purpose of this paper is to examine whether substantial differences in institutional environment in China lead to different levels of demand for political connection. Design/methodology/approach – Using a data set of 296 listed private sector enterprises (PSEs) in China, the authors empirically investigate the effects of institutional environmental factors upon political connection. Findings – The authors find that the lower the level of regional property right protection, the more powerful the government intervention, and the slower the economic development, the more motivated the PSEs were to build relationship with the government via partial state ownership. However, the degree of local corruption was not correlated with the demand for political connection. The authors also find that partial state ownership in PSEs exerted a positive effect on performance. Originality/value – Deviating from previous literature that has been mostly concerned about the economic consequences to firms caused by political connections, this paper examines the reasons for political connection among Chinese PSEs. The authors introduce a new dimension of political connection, namely, partial state ownership in PSEs.

scholarly journals KEPEMILIKAN MANAGERIAL, RISIKO INTERNAL DAN EKSTERNAL, EFISIENSI DAN NET INTEREST MARGIN (NIM) DI BURSA EFEK INDONESIA

2019 ◽  
Vol 8 (2) ◽  
pp. 146
Author(s):  
Ardian Prima Putra
Keyword(s):  
Stock Exchange ◽  
Negative Influence ◽  
Managerial Ownership ◽  
Operating Income ◽  
Net Interest Margin ◽  
Number Of Factors ◽  
The Government ◽  
External Risk ◽  
Positive Effect ◽  
Interest Margin

This study aims to obtain empirical evidence of a number of factors that can affect the Bank's Net Interest Margin (NIM) on the Indonesia Stock Exchange (IDX) in 2010-2016. The factors that are thought to influence NIM in this study are managerial ownership, internal risk (non-performing loans (NPL)), external risk (inflation), and efficiency (operating expenses and operating income (BOPO)). This research is expected to be beneficial for bank shareholders in supervising and controlling bank management in managing NIM at the Bank, for management the bank can control the NIM at the bank, for the government to determine the bank's NIM policy appropriately, and for further research can add referrals in the field of banking research especially the NIM. This study uses multiple linear regression test, with the results simultaneously independent variables namely managerial ownership, non-performing loans, inflation, BOPO have a positive effect on Net interest Margin (NIM), while the partial test results (T-test) is variable NPL, inflation has a negative influence on the net interest margin (NIM) while the other variables do not have a bearing on the NIM. Keywords : Net Interest Margin, Managerial Ownership, Risk, Efficiency, IDX  

scholarly journals Abnormal Related Party Transactions, Political Connection, and Firm Value: Evidence from Indonesian Firms

2021 ◽  
Vol 22 (1) ◽  
pp. 461-478
Author(s):  
Supatmi Supatmi ◽  
Sutrisno Sutrisno ◽  
Erwin Saraswati ◽  
Bambang Purnomosidhi
Keyword(s):  
Firm Value ◽  
Resource Dependence ◽  
Stock Exchange ◽  
Resource Dependence Theory ◽  
Political Connections ◽  
Political Connection ◽  
Related Party Transactions ◽  
Panel Data Regression ◽  
Data Regression ◽  
Better Than

This study aims to examine the effect of abnormal related party transactions (RPTs) on firm value and to investigate political connections as a moderator of the causal relationship. Our sample is 450 Indonesian firms listed at the Indonesia Stock Exchange during the period of 2014–2017 with a total of 1,724 firm-year observations. Based on the panel data regression test, our results demonstrate that abnormal RPTs, especially account receivables-related RPTs and account payables-related RPTs, decrease firm value. Further, the results empirically show that political connections negatively affect firm value. Political connections strengthen the effects of abnormal non-account receivable RPT assets and abnormal non-account payable RPT liabilities on firm value. Our findings imply that agency theory explains the impacts of political connections of Indonesian firms better than resource dependence theory.

scholarly journals Institutional Ownership, Political Connestions and Dividend Payment

2020 ◽  
Vol 9 (1) ◽  
pp. 46-52
Author(s):  
Ratna Yunita ◽  
Arief Yulianto
Keyword(s):  
Regression Model ◽  
Analytical Method ◽  
Stock Exchange ◽  
Institutional Ownership ◽  
Payout Policy ◽  
Positive Influence ◽  
Political Connections ◽  
Political Connection ◽  
Dividend Payment ◽  
Payment Policies

This study aims to examine the effect of institutional ownership and differences in the average dividend payout policy in the presence of a political connection variable. The population in this study are all companies listed on the Indonesia Stock Exchange in 2008-2017. The sample in this study was based on purposive sampling. The sample of this study were 1157 observations. The analytical method used is a dummy covariance analysis (ANCOVA) regression model. The results showed that institutional ownership had a coefficient value of 0.039768. political connections have a coefficient value of 0.042068. That is, institutional ownership and political connections have a positive influence on dividend payment policies in Indonesia.

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