The political economy of Indonesia’s large-scale industrial structure is two-fold: business
groups of allied firms under common control, typically by family-based (and frequently) founding
owners; and state-owned enterprises. While beyond the scope of this paper, it should be stressed
that the implementation of good corporate governance rules and practices for state enterprises is
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at least as important as for private listed companies. Because of their central importance,
business-group corporate governance issues will be raised throughout this paper.