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Download by: [Universitas Maritim Raja Ali Haji] Date: 17 January 2016, At: 23:45
Bulletin of Indonesian Economic Studies
ISSN: 0007-4918 (Print) 1472-7234 (Online) Journal homepage: http://www.tandfonline.com/loi/cbie20
Essays on Corporate Governance and Corporate
Illegality: Investigations into Firm Performance
and Firm Bribery
Dendi Ramdani
To cite this article: Dendi Ramdani (2013) Essays on Corporate Governance and Corporate Illegality: Investigations into Firm Performance and Firm Bribery, Bulletin of Indonesian Economic Studies, 49:2, 240-241, DOI: 10.1080/00074918.2013.809845
To link to this article: http://dx.doi.org/10.1080/00074918.2013.809845
Published online: 26 Jul 2013.
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240 Abstracts of doctoral theses on the Indonesian economy
this permit yet are still regarded as illegal by the state government. This situation contradicts that of the existing large mining companies that receive permits from the state government, and blurs the legal and the illegal.
This thesis examines informal mining in three locations: gold mining in the Mount Pongkor area, near Cisarua Village, in West Java; tin mining in West Bangka;
and coal mining in South Kalimantan. It uses ield-based methodologies to track
the informal ‘mineral cycle’ – from mining to marketing – as well as thrashing out the gaps and inconsistencies in the legal structure of mineral-resource governance during and after the New Order regime. The study also throws light on the opera-tion of the informal networks and their demand-and-supply responses. Above all, it evaluates Indonesia’s informal mining economy.
The thesis inds that informal miners are unwilling to leave the illegal spec -trum, despite their being regulated; they believe that they are better off within it, and that applying for a mining permit is overly costly and bureaucratic. In contrast, the government is reluctant to acknowledge informal mining, since the sector contributes much less to the state’s income than formal mining entities. It is
more convenient for informal miners to bribe security oficers of the mining com -pany, for example, or to cooperate with local authorities, than to follow regula-tions. For informal miners, these actions are preferable to watching their resources being swallowed up by large mining companies.
© 2013 Nina Indriati Lestari
http://dx.doi.org/10.1080/00074918.2013.809847
Essays on Corporate Governance and Corporate Illegality: Investigations into Firm Performance and Firm Bribery
Dendi Ramdani (dendi.ramdani@ua.ac.be)
Accepted 2013, University of Antwerp
Comprising two pairs of studies, this thesis examines the impacts of corporate
governance on irm performance (in Indonesia, Malaysia, Thailand and South Korea) and irm bribery (in more than 50 countries, including Indonesia). The irst pair of studies aims to deine the critical contexts that determine the eficacy of corporate governance. Using irm-level data from the Asian Development Bank
Institute’s Survey of Corporate Governance Practices (2003), it asks (1) whether
conditional irm performance, measured by accounting performance (that is, by the return on assets), affects the eficacy of board independence and CEO dual -ity, and (2) how resolving agency problems can create interdependencies (that is, complementarities and substitutabilities) between corporate governance
mecha-nisms. The second pair of studies focuses on irm bribery as an example of an illegal strategy used for proit by managers and/or irms. Examining global
irm-level data from the World Business Environment Survey (2000) and the World Bank Enterprise Survey (2002–05), it asks (1) which organisational constraints
and motives drive a irm to engage in bribery and (2) how do agency problems increase or decrease the likelihood of irm bribery.
The irst pair of studies inds that conditional irm performance affects the eficacy of corporate governance mechanisms in resolving agency problems; that
Abstracts of doctoral theses on the Indonesian economy 241
interdependencies between such mechanisms suggest that the eficacy of corpo -rate governance is determined by a bundle of mechanisms rather than by a
sin-gle mechanism; and, as the main contribution of this thesis, that the eficacy of
corporate governance depends on its organisational and institutional contexts. It argues that any entrenchment of controlling shareholders, or of CEOs, will be
more severe in high-performing irms than in poorly performing irms, because
of the greater opportunities for power and status presented by the former. It also argues that corporate governance mechanisms are more effective in
high-performing irms, and that CEO duality (where a irm’s CEO is also its board
chairperson) is superior to CEO non-duality in East Asian countries, where many transactions are based on personal relationships instead of market conditions, contradicting Anglo-Saxon models of corporate governance (such as those based on agency theory).
The second pair of studies inds that internal constraints (such as inancial
auditing), external constraints (such as institutional quality) and external motives
(such as competition pressure) are signiicant in preventing irm bribery. It inds
no evidence that internal motives (such as organisational sales growth and size)
are critical in initiating irm bribery, which tends to be driven by opportunity and external motives. However, it does ind evidence that irms with an owner-man -ager are more likely to engage in bribery than those with an owner not man-ager
(a professional manager runs the irm) if the owner-manager is male, because owner-managers tend to internalise any increases in the irm’s value, whether
from legal or illegal strategies, whereas professional managers are often less
will-ing to risk their own reputations by takwill-ing part in illegal activities. It also inds evidence that irms with female principal owners are less likely to engage in brib -ery than those with male principal owners.
This thesis contributes to the empirical development of corporate governance research, by examining the literature on corporate governance operating in open systems and by providing an example of how corporate governance variables
relate to irm bribery, or to illegal activities in general.
© 2013 Dendi Ramdani
http://dx.doi.org/10.1080/00074918.2013.809845
