POLITICAL CONNECTION AND DIVIDEND POLICY OF KOMPAS - 100 FIRMS FROM 2013 – 2017

• Main Author: Maharani Parameswari Sa, Regina
• Format: Final Project
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/40970
• Institution: Institut Teknologi Bandung

This paper aims to investigate the influence of political connection on Dividend Policy in Indonesia. We used Indonesia listed firms that are selected in KOMPAS 100 index for five consecutive years from 2013 – 2017, the total is 330 observation and consist of 66 firms. Using GLS and Logistic regression we find a positive influence of political connection on dividend in Indonesia. The political connection effect is analyzed based on the different characteristics of ownership structure, and board structure. Interestingly, we find Stated Owned Enterprises have a positive relationship with the dividend policy, also the evidence shows that politically connected of board director are more likely to spend higher dividend than politically connected of board commissioners. Furthermore, larger firm and with high Tobin's q are more likely to spend higher in the dividend. The findings are robust using different measures of political connection and controls.