Political Connection dan Corporate Governance terhadap Cost of Debt Perusahaan

This study aims to examine the influence of political connection to the amount of comapanies cost of debt. In addition this study aims to determine the effect their independece board and managerial ownership to the cost of debt of companies related to politics or political connection. The dependent variable in this study is the cost of debt, the independent variable in this study is a political connection, board independence, and managerial ownership. While the control variables in this study is the leverage, roa, size, growth, and tangible asset intensity. The sample in this research is a public company in every sector except financial sector in Indonesia Stock Exchange during the period 2010 to 2014. The total sample is 292 companies and identification of any political connection. Samples were selected using certain criteria (purposive sampling). Testing in this research using panel data estimation with eviews program 9 for windows. The results of this study revealed a positive and significant correlation between political connection and cost of debt which means creditors assume its related companies politically more risky and have a high default risk. Also in this study the control variable leverage, roa, size, and growth is significant of the cost of debt while the variable control of tangible assets intensity is not significant to the cost of debt. The independent variables for independent board and managerial ownership the results are not significant with the cost of debt. Because it is assumed in this study board independence and managerial ownership no impact on the determination of the cost of debt is rated by the creditor