Title: Political connections and firm performance: evidence from the mobile industry in Indonesia

Authors: Arniati Arniati; An An Chiu; Shaio Yan Huang; Ching-Wen Lin

Addresses: National Chung Cheng University, No. 168, Sec. 1, University Rd., Minhsiung, Chiayi, Taiwan; Batam State Polytechnic University, Jl. Ahmad Yani Batam Kota, Kota Batam, Kepulauan Riau, Indonesia ' Feng Chia University, No. 100, Wenhua Rd.., Taichung City, Taiwan ' National Chung Cheng University, No. 168, Sec. 1, University Rd., Minhsiung, Chiayi, Taiwan ' CTBC Graduate School of Financial Management, CTBC Financial Management College, No. 600,Sec. 3, Taijiang Blvd., Annan Dist., Tainan City, Taiwan

Abstract: This study investigates whether political connections in the mobile industry are associated with performance. The mobile industry is a restricted business in Indonesia, where the rules for business entry and business operations are abundant, such as operational licences, tariffs, and implementation policies. The study expects that mobile firms with political connections perform better than those without political connections. The results indicate the different impacts of political connections on firm performance, measured by ROA and Tobin's Q. The study also finds different results in political connections and performances on a family-owned mobile company and a non-family-owned mobile company, including SOE. Moreover, the study investigates different forms of political connections including companies, government or military, politicians, and parliament. The study suggests that the multiple political connection types have different effects on firm performances.

Keywords: political connections; mobile industry; military connection; government authority connection; parliament connection; performance.

DOI: 10.1504/IJMC.2024.135697

International Journal of Mobile Communications, 2024 Vol.23 No.1, pp.61 - 84

Received: 11 Nov 2020
Accepted: 13 Mar 2022
Published online: 22 Dec 2023 *