Role of Political Connections and Family Ownership to Related Party Transactions in Indonesia

A related party transaction is a transfer of resources, services or obligations between the reporting entity and related parties, regardless of whether a price is charged. There are several factors that can influence abusive or efficient related party transactions, namely family ownership and political connections. This study discusses the effect of family ownership and political connections on related party transactions with control variables, namely audit quality, firm size, profitability and firm age. This research focuses on mining companies listed on the Indonesian stock exchange in 2016-2020 with a research sample of 170 companies. Data analysis used Eviews 9 with the Random Effect Model test. The results of the study show that family ownership and political connections have an effect on related party transactions. Control variables are audit quality, company size, company age effect on related party transactions. Profitability has no effect on related party transactions