Influence Of Political Connections Research Articles

Being politically connected: corporate charitable giving before and after the 2016 Charity Law

Purpose Charitable giving in China has moved from being subjected to government attention and public skepticism to receiving government encouragement and public support. The role played by political connections in philanthropy is indisputable, although very few studies have explored their association from the perspective of the country’s first Charity Law of 2016. This study aims to contribute to the ongoing debate about the 2016 Charity Law and offers an understanding of the future trends in corporate charitable giving. Design/methodology/approach Using empirical analysis of data collected from listed companies in China, this study analyzes the impact of political connections on corporate charitable giving before and after the 2016 Charity Law. The study adopts three leading theories from previous research into corporate charitable giving and political connections: corporate social responsibility, resource dependence theory and stakeholder theory. A conceptual framework is outlined, and hypotheses are formulated accordingly. Findings The results show that political connections have a substantial positive impact on corporate charitable giving, both before and after the implementation of the 2016 Charity Law, which has significantly promoted and increased the amount and proportion of charitable giving. Although the 2016 Charity Law attempted to weaken the political connections of enterprises, the influence of political connections on corporate charitable giving has proved difficult to diminish or eliminate, as charity is dominated by the state. Originality/value This study explores the association between political connections and corporate charitable giving from the perspective of China’s Charity Law of 2016.

Apakah Komisaris Independen Memoderasi Hubungan Koneksi Politik, Kepemilikan Institusional, Dan Manajemen Laba?

Purpose: This research aims to empirically prove the influence of political connections, institutional ownership and independent commissioners on earnings management in non-cyclical consumer sector manufacturing companies listed on the IDX in 2018 - 2022. Methodology/approach: this research uses quantitative methods whose data is obtained from the official website of the Indonesia Stock Exchange (BEI). The method used in sampling was purposive sampling, so that the sample obtained in this research was 17 companies with 85 observation data. The data analysis method used is multiple regression analysis with the help of SPSS version 25 data processing application software. Findings: The results of this study found that the presence of independent commissioners in the company will create tighter and more objective supervision of the financial reporting process so that it will prevent earnings management actions carried out by politically connected managers and with high institutional ownership within the company the institutions will be able to control company and will avoid earnings management practices. Practical and theoretical contributions/Originality: this research provides benefits for related parties such as investors. The results of this research provide new knowledge and insight for investors when they want to invest in a company. With this research, investors are able to assess and analyze a company whether the company is worthy of investment or not. Research limitations: this research has limitations, namely the difficulty in accessing data on each company's website because there are several companies whose data is incomplete. Apart from that, the sample used was too small due to certain criteria so that the sample was limited and the researcher only focused on one sector.

Political protection: The case of large‐scale oil spills and the stock prices of energy firms

AbstractIn this study, we utilize a sample of publicly traded US energy firms to investigate the stock market responses to 40 large‐scale oil spills. Our findings reveal that the stock prices of extraction and refining firms experience significant declines during the periods surrounding these oil spill incidents, and energy pipeline firms exhibit a relatively smaller decrease. These results underscore the risk exposure shared by all energy firms, irrespective of their direct involvement in the oil spill incident. Furthermore, our study uncovers an intriguing dynamic—the influence of political connections established through lobbying activities. We observe that these political ties serve to significantly mitigate the negative market reactions to oil spills. Our results suggest that, from the market's perspective, firms with political connections are less vulnerable to the impending costs associated with oil spills when compared to their non‐politically connected counterparts.

Pengaruh Koneksi Politik terhadap Audit Fee

This study examines the influence of political connections with the control variables of company size, debt equity ratio and profitability on audit fees for BUMN companies in Indonesia for the 2018-2022 period. The sample was determined by purposive sampling method and 32 BUMN companies were obtained as sample. The type of used is secondary data using multiple linear regression analysis. The results of the study are that political connections influence audit fees. The control variable company size has an effect on audit fees, while debt equity ratio and profitability have no effect on audit fees.

The Influence of Political Connections on Banking Performance with Board of Directors Diversity as a Moderating Variable

The study endeavors to empirically demonstrate how political ties impact the performance of banks, while considering the Board of Directors' diversity as a potential influencing factor among banking firms listed on the Indonesia Stock Exchange during the 2017-2022 period. Within this research, political connections are represented as dummy variables, denoting firms linked with the government, directors having affiliations with shareholders, or associations with political parties or other governmental bodies. Banking performance is assessed through proxies such as ROA, ROE and loan loss provision. The diversity of the board of directors, evaluated by the ratio of female directors to the total board members, serves as a moderating variable. The research formulates two hypotheses, all of which underwent testing using the SPSS 28 application. Findings revealed that political connections positively influence banking performance as measured by ROA, demonstrate no impact on ROE, and exhibit a significant negative effect on LLP. Moreover, the diversity of the board of directors moderates the correlation between political connections and banking performance in terms of ROA and ROE, while it does not moderate this relationship concerning LLP. The implication of this research is based on the theory of resource dependence where political connections owned by banks provide benefits to firm in the form of easy market access and are able to reduce banking performance in the form of decreasing bad debts. These findings might prompt future regulators to contemplate regulations concerning gender diversity within board compositions, considering its potential implications for governance and performance.

The Influence Between Corporate Social Responsibility and Political Connections on Tax Aggressivity through Institutional Ownership As A Moderation Variable

The aim of this research is to determine the influence between corporate social responsibility and political connections on tax aggressiveness through institutional ownership as a moderating variable. This type of research is quantitative research, involving all companies listed on the Indonesian Stock Exchange in the 2017-2021 year of observation as the population. The data sources used in this research are secondary data obtained from company websites and the Indonesian Stock Exchange website (www.idx.co.id). The quantity of CSR as measured by calculating how much information related to corporate social responsibility has a negative influence on the presence of tax aggressiveness within the company. CSR quality has a negative influence on tax aggressiveness, which means that CSR quality can pressure companies to be tax aggressive. The existence of political connections that a company has no effect on the tax aggressiveness carried out by the company. Institutional ownership can moderate the quantity of CSR on tax aggressiveness. Institutional ownership moderates the relationship between CSR quality and tax aggressiveness. In the analysis results, it is proven that institutional ownership strengthens the negative influence of CSR quality on tax aggressiveness. Has been proposed that institutional ownership can moderate the influence of political connections on tax aggressiveness.

Influence of Political Connections and Efficiency on Financial Performance and Its Implications on Firm Value

Influence of Political Connections and Efficiency on Financial Performance and Its Implications on Firm Value

Do Political Connections Affect Tax Avoidance in Indonesia? A Systematic Review and Meta-Analysis

Previous correlational studies have shown a significant effect between political connections and tax avoidance. However, this also cannot deny other empirical facts which state that there is no significant influence between political connections and tax avoidance. This study aims to generalize the results of previous studies that discuss the influence of political connections and tax avoidance in Indonesia. Quantitative methods were chosen to analyze this; the researchers used Systematic Review and Meta-Analysis. We searched for eligible studies from the databases Garba Rujukan Digital (GARUDA), Ebsco, and Google Scholar until 17 September 2022. Meta-analysis was carried out using STATA software with the help of Microsoft Excel to calculate the effect size of each study data. Fourteen studies were successfully netted for analysis, of which 14 developed into 29 data using the data available in each study. We find that the relationship between political connections and tax avoidance in Indonesia has an insignificant direction; this is indicated by the value of z = -1.23 and p-value of 0.22 or above 0.05. It is the latest study in Indonesia to investigate the relationship between political connections and tax avoidance. Furthermore, the test results indicate that differences in tax avoidance proxies affect the test results for political connections. In contrast, there was no significant effect on the political connection proxy. The relevant tax authorities can consider significant tax avoidance proxies for political connections as one of the detection indicators in the Compliance Risk Management of Taxpayer Supervision. 

Apakah Koneksi Politik Mempengaruhi Pengungkapan Lingkungan?

Purpose: This research aims to determine the influence of political connections, company size and company age on environmental disclosure in manufacturing companies listed on the IDX in 2020-2021, either simultaneously or partially, by using company size and company age as control variables.. Methodology/approach: This research uses quantitative methods through a sampling approach, obtaining 99 companies with 198 data. Using multiple linear regression analysis. Data processing was carried out using SPSS Statistics 25. Findings: The results of this study indicate that political connections and company size have a significant positive impact on corporate environmental disclosure. However, company age does not have a significant impact on environmental disclosure. Practical and Theoritical contributio/Origanlity: This research provides knowledge about political connections, company size and company age for environmental disclosure of manufacturing sector companies in 2020-2021. The implication is that companies use environmental disclosure to generate good relations with the government and are expected to increase positive views of the company and attract investors to invest. Research Limitation: This research is still limited to the scope of the research sample for a research period of two years so that the results do not reflect the long-term situation. In addition, it does not discuss the quality of environmental disclosure items disclosed by the company.

Manajemen Laba Aktivitas Rill Dalam Bingkaian Teori Akuntansi Positif

Positive accounting theory is the basis for describing the reasons managers take opportunistic actions regarding the accounting policies used. Managers' opportunistic behavior towards profit regulation causes the quality of financial reports to decline. This research aims to examine the influence of political connections and bonus compensation on real activity earnings management. Manufacturing companies listed on the Indonesian Stock Exchange from 2016 to 2022 represent the population of this study. The sampling technique for this research uses the census method. The data analysis technique uses path analysis assisted by SmartPLS 3.0. The research results show that bonus compensation and political connections influence real activity earnings management. This research provides theoretical contributions to strengthen the three hypotheses of positive accounting theory. This research provides a practical contribution for investors as a strategy in determining investment in companies that produce quality financial reporting with minimal risk of conflict of interest. The contribution for the government is to strengthen the tax law revision policy to reduce earnings management practices.
 Keywords: Politic; Bonus; Earning Management; Real Activities

Koneksi Politik, Gender Diversity, Inovasi dan Kesadaran Kewajiban Pajak Perusahaan

This research aims to test and analyze the influence of political connections, gender diversity, and innovation on corporate tax obligations. This research used 315 samples from 45 manufacturing companies listed on the Indonesia Stock Exchange in 2015-2021. Technical data analysts use multiple linear regression. The research results show that political connections do not have a significant effect on tax compliance because manufacturing companies want to maintain good relations with stakeholders, by being obedient and obedient in fulfilling their tax obligations without taking advantage of political connections. Gender diversity has a significant positive effect on tax compliance because women have the spirit of minimizing risks, avoiding fraud, obeying regulations so that it will lead to positive actions in taxpayer compliance. Innovation has a significant positive effect on tax compliance because companies can make innovation an effort to improve product quality which results in company expenses increasing and profits generated by the company decreasing and resulting in tax avoidance or decreased tax compliance.
 Keywords: Political Connections; Gender Diversity; Innovation and Tax Compliance

Pengaruh Koneksi Politik, Direksi Luar Perusahaan, Komisaris Independen dan Gender Direksi terhadap Kinerja Bank Pembangunan Daerah: Inovasi Keuangan sebagai Variabel Moderasi

This research is intended to examine the influence of political connections, outside directors, independent commissioners and gender of directors on the performance of regional development banks with financial innovation as a moderating variable. The object in this study is the 2017-2021 Regional Development Bank (BPD). The total sample in this study was 26 BPD. The analytical method used in this research is to carry out Partial Least Square (PLS) analysis assisted by the SmartPLS 3.0 program. The findings show that political connections have no effect on BPD performance, outside directors have a negative and significant effect on BPD performance, independent commissioners have no effect on BPD performance, directors' gender has a positive and significant effect on BPD performance, financial innovation does not moderate the influence of political connections on BPD performance, financial innovation moderates the influence of outside directors on BPD performance, financial innovation moderates the influence of independent commissioners on BPD performance, and financial innovation does not moderate the influence of directors' gender on BPD performance. It is hoped that the results of this research can contribute to academics in adding to the literature regarding the financial performance of Regional Development Banks (BPD) and also increase insight for companies in improving financial performance.

PENGARUH KONEKSI POLITIK, KARAKTER EKSEKUTIF, DAN KOMITE AUDIT TERHADAP PENGHINDARAN PAJAK

This study aims to analyze the influence of political connections, executive character, and audit committees on tax avoidance in mining companies listed on the Indonesia Stock Exchange (IDX) in 2019-2021. The type of data used in this research is secondary data, namely the financial reports of mining companies listed on the Indonesia Stock Exchange for 2019-2021. The sample in this study amounted to 12 companies obtained using the Purposive Sampling method. The results of this study show that political connections have no effect on political connections, executive character has no effect on tax avoidance, and audit committees have no effect on tax avoidance

The Influence of Political Connections, Related-Party Transactions, and Corporate Governance on Tax Avoidance in Manufacturing Companies Listed on the Indonesia Stock Exchange

This study aims to examine the influence of political connections, related-party transactions, and corporate governance on tax avoidance. The sample for this research consists of manufacturing companies listed on the Indonesia Stock Exchange during the period of 2014-2019. The sample was selected using purposive sampling technique, resulting in 25 companies. The analytical technique employed in this research is panel data regression analysis using Eviews version 10 software. The research findings indicate that political connections, related-party transactions, the proportion of independent commissioners on the board, audit quality, and the audit committee have a significant influence on tax avoidance in Indonesian manufacturing companies.

When politics meets sustainability: the effect of independent directors' political connections on corporate sustainability disclosure in China

PurposeThis paper investigates the influence of political connections on sustainability disclosure in the context of China's Regulation 18.Design/methodology/approachThe study employs a quasi-experimental approach, utilizing difference-in-difference (DiD) analysis, dynamic DiD and propensity score matching to analyze the effects of politically connected independent directors on sustainability disclosure following the implementation of Regulation 18.FindingsCompanies with politically connected independent directors show an improvement in sustainability disclosures after Regulation 18. This effect is stronger for firms facing high political pressure or lacking alternative political power. Additionally, the increase in value from sustainability disclosures compensates for the loss of politically connected independent directors, indicating a positive value impact of sustainability disclosures.Originality/valueThis study provides novel insights into the corporate disclosure policy in China by investigating the impact of politically connected directors on sustainability disclosure. Additionally, it sheds light on the limitations of political power and its substitution effects within companies.

Pengaruh Koneksi Politik, Direksi Luar Perusahaan, Komisaris Independen dan Gender Direksi terhadap Kinerja Bank Pembangunan Daerah: Inovasi Keuangan sebagai Variabel Moderasi

This research is intended to examine the influence of political connections, outside directors, independent commissioners and gender of directors on the performance of regional development banks with financial innovation as a moderating variable. The object in this study is the 2017-2021 Regional Development Bank (BPD). The total sample in this study was 26 BPD. The analytical method used in this research is to carry out Partial Least Square (PLS) analysis assisted by the SmartPLS 3.0 program. The findings show that political connections have no effect on BPD performance, outside directors have a negative and significant effect on BPD performance, independent commissioners have no effect on BPD performance, directors' gender has a positive and significant effect on BPD performance, financial innovation does not moderate the influence of political connections on BPD performance, financial innovation moderates the influence of outside directors on BPD performance, financial innovation moderates the influence of independent commissioners on BPD performance, and financial innovation does not moderate the influence of directors' gender on BPD performance. It is hoped that the results of this research can contribute to academics in adding to the literature regarding the financial performance of Regional Development Banks (BPD) and also increase insight for companies in improving financial performance.

The Influence Of Political Connections And Capital Intensity Ratio On Effective Tax Rate: Moderated by Profitability

The objective of the research was to determine dan analyze the influence of political connection dan capital intensity ratio on effectivetax rate as a moderating variable on profitability. The research method used is a quantitative method with sampling using purposivesampling. The research sample is 72 mining sector company data listed on the Indonesia Stock Exchange for the 2018-2021 period. The research analysis uses path analysis with the help of the SEM-PLS 3.3 application The results of the study show that political connections affect the effective tax rate. The capital intensity ratio does not affect the effective tax rate. While profitability can moderate political connections and profitability are not able to moderate the capital intensity ratio on the effective tax rate. This research is expected to contribute to providing input dan an overview regarding tax avoidance so that it can help stakeholders such as the government to make decisions dan policies on tax regulations that will be applied.

Political connections and labor investment efficiency: Evidence from China's private firms

AbstractThis study investigates whether political connections affect labor investment efficiency. We test this question in the context of China's private firms, where we find that political connections are negatively associated with labor investment efficiency. We also explore the channels through which political connections reduce labor investment efficiency and provide evidence that political connections aggravate both agency problems and information asymmetry. Further tests show that the influence of political connections is more pronounced for firms with overinvestment problems or high‐level political connections, and for firms from regions facing severe unemployment or loose anticorruption. Overall, our results are consistent with the “grabbing hand” argument that politicians destroy firm operational efficiency.

The Effect of Political Connection, Independent Commissioners And Sales Growth On Earning Management with Company Size as A Moderating Variable

The purpose of this research is to analyze the effect of Political Connection, Independent Commissioner, sales growth on earnings management. The population of this research is all manufacturing companies in the consumer industry sector that are listed on the Indonesia Stock Exchange from 2018 to 2021. There are 31 companies that meet the criteria using the purposive sampling method. The results show that sales growth have a positive effect on earnings management. Political connections and independent commissioners have no effect on earnings management. The moderating variable of company size is able to strengthen the effect of sales growth on earnings management but is unable to strengthen the influence of political connections and independent commissioners on earnings management.

How revolving-door recruitment makes firms stand out in land market: Evidence from China

The fact that firms seek political connections through revolving-door recruitment is widely acknowledged around the world. Using an original database including the information of listed firms' board members and parcel-level land transaction records, this paper documents how revolving-door recruitment makes firms stand out in China's land market. We show that firms with revolving-door recruitment receive special deals in land transactions, which are simultaneously reflected in the quantity and price of land. Specifically, connected firms buy more parcels and larger areas of land in the primary land market. Due to the particularity of industrial land, price discounts are only identified for commercial and residential land, while not for industrial land. Measuring economic activity by night light intensity, we find no evidence that land transaction under the influence of political connections has a negative impact on economic activity on land. Our research advances the understanding that the state-business relationship is an essential factor in resource allocation in an emerging market with government intervention.