Abstract

This study investigates the relationship between firms with family ownership and managerial short-termism and how political connections affect this relationship. The final sample of this study is 959 firms year observations of non-financial firms listed on Indonesia Stock Exchange (IDX) between year 2014 to 2016. We find that firms with lower family ownership are more likely to be engaged in short-termism. With the increase of family ownership, family firms better preserve its future well-being and, therefore, are freed from managerial short-termism. Interestingly, we find that political connections moderating the family firms to become short-termism regardless the level of family ownership. These findings imply that the level of family ownership affect the firms's decision on research and development and political connections are able to make family firms to be more short-termism.

Original languageEnglish
Pages (from-to)186-202
Number of pages17
JournalJournal of Security and Sustainability Issues
Volume9
Issue numberJ
DOIs
Publication statusPublished - Jan 2020

Keywords

  • Family firms
  • Managerial short-termism
  • Political connection

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