Title: How do political connection and intellectual capital affect the debt usage of majority shareholders? Evidence in Indonesia

Authors: Adi Kurniawan Yusup; Cicilia Erna Susilawati

Addresses: Doctoral Programme of Business Department, Widya Mandala Catholic University, Surabaya, Indonesia ' Doctoral Programme of Business Department, Widya Mandala Catholic University, Surabaya, Indonesia

Abstract: This research intends to examine majority shareholder ownership's effect on debt moderated by political connection and intellectual capital. This study uses 747 firm-year observations of non-financial companies in Indonesia from 2018-2020. The finding shows that majority ownership has an inverted U-shape relationship on debt, but its effect is less significant in non-family firms. Political connection does not act as a moderator, while intellectual capital does only for family firms. Meanwhile, political connection and intellectual capital together alleviate majority ownership and debt relationship for both types of companies.

Keywords: majority shareholder ownership; debt; political connection; intellectual capital; Indonesia.

DOI: 10.1504/IJBEM.2023.128160

International Journal of Business and Emerging Markets, 2023 Vol.15 No.1, pp.34 - 52

Received: 04 Sep 2021
Accepted: 02 Aug 2022
Published online: 09 Jan 2023 *