Dividend Payments of Politically Connected Companies: Evidence from the Indonesian Stock Market
DOI:
https://doi.org/10.1229/tecempresarialjournal.v18i1.163Abstract
Indonesia is one of the developing countries, but the condition of the stock market in Indonesia is quite promising with many investors making investments. One of the demands from investors is the payment of dividends by the company, but there are several factors that influence the payment of dividends including the busy board and political connections owned by the company. This study attempts to describe the ability of companies to pay dividends in Indonesia in terms of the level of activity of the board and whether or not there is political connection within the company. The population in this study are all manufacturing sector companies listed on the IDX for the 2017-2021 period, totaling 898 companies. Data tested with Moderated Regression Analysis (MRA). This research shows that corporate boards that are highly busy and have political positions tend to make it easier for companies to gain financial benefits and fulfill their obligations to investors. This research is limited to manufacturing companies, so deeper research is still open related to companies in other sectors. This research is expected to open up information to investors regarding the ability to pay dividends of companies with political connections in Indonesia. Several previous studies have examined the effect of busy boards on dividend payments, but there has been no research using politically connected companies as a moderating variable in this relationship, even though politically connected companies can influence the condition and performance of the company if there is a board holding a political position, so that politically Indirectly, this political connection is indicated to strengthen the influence of the busy board on dividend payments.
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