Political Connection and Corporate Social Responsibility: Evidence from Indonesia

  • Yunieta Anny Nainggolan School of Business and Management Institut Teknologi Bandung
  • Endang Dwi Astuti School of Business and Management Institut Teknologi Bandung
  • Raden Aswin Rahadi School of Business and Management Institut Teknologi Bandung
  • Kurnia Fajar Afgani School of Business and Management Institut Teknologi Bandung
Keywords: Political Connection, Corporate Social Responsibility, Corporate Governance, Indonesia


This paper aims to investigate the influence of political connection on Corporate Social Responsibility (CSR) expense in Indonesia. We use a sample of 682 firm-year observations between 2010 and 2015. Using the individual-level of political connections, we find that the political connection is an important determinant of CSR expense. The political connection effect is analyzed based on the different characteristics of ownership structure, board structure, and affiliated party. We find that state-owned enterprises and privately-owned enterprises that politically connected are positively associated with CSR expenses. Interestingly, the evidence shows that politically connected board of commissioners are more willing to spend in CSR activities, while politically connected board of directors have no significant concern regarding CSR. Furthermore, politically connected firms that contribute to CSR are from government-leaning firms, while opposition-leaning firms show different matters. The findings are robust using different measures of political connection and controls.


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How to Cite
Yunieta Anny Nainggolan, Endang Dwi Astuti, Raden Aswin Rahadi, & Kurnia Fajar Afgani. (2021). Political Connection and Corporate Social Responsibility: Evidence from Indonesia. International Journal of Business and Society, 22(2), 922-940. https://doi.org/10.33736/ijbs.3767.2021