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

Abstract

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.