The Effect of Political Relation on Firm Value at Manufacturing Companies
- 10.2991/aebmr.k.210416.026How to use a DOI?
- Political Connection, Firm Value, Manufacture
This research aims to determine the effect of political relation on the firm value at basic chemical manufacturing companies listed on the Indonesia Stock Exchange. The reason for using chemical and basic industry sectors is it has a growth of high stock price. The type of this research is an explanatory quantitative research. Data collected based on annual reports from 68 manufacturing companies in the chemical industry and basic sectors in Indonesia during the period 2014- 2017. The total sample in this research was 251 companies. Political relations are measured by using Dummy variable and companies’ value measured by using Tobins’ q. This study used multiple linear regression analysis technique. The results of this research show that political relations have a positive effect on firm value and also indicate that companies whose have the political relations get facilities access from the government, so it can be used to achieve company goals, which is increasing companies’ value. The limitation of this research is the companies’ annual report only describe relations from direct political relations. Therefore, indirect relationships such as friendship and family cannot be identified. Suggestions for further research related to political relations on firm value is to replace Dummy variable measurement with ratio data.
- © 2021, the Authors. Published by Atlantis Press.
- Open Access
- This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).
Cite this article
TY - CONF AU - Luxy Meida Happy Timami AU - Makaryanawati PY - 2021 DA - 2021/04/19 TI - The Effect of Political Relation on Firm Value at Manufacturing Companies BT - Proceedings of the 7th Regional Accounting Conference (KRA 2020) PB - Atlantis Press SP - 203 EP - 211 SN - 2352-5428 UR - https://doi.org/10.2991/aebmr.k.210416.026 DO - 10.2991/aebmr.k.210416.026 ID - Timami2021 ER -