A Study On The Political Connection And Enterprise Growth Of Chinese Private Listed Companies

Many studies have shown that there is a widespread political connection in the world.Especially under the background of the “relationship” society and transitional economic system in China,the government holds the allocation rights of “scarce resources” needed by enterprises and the right of examination and approval of various administrative systems,which makes China private enterprises more interested in politics.So what is the impact of political connection on the growth of the enterprises? How does political connection affect business growth? With such questions,began writing the paper.First of all,based on the theoretical background and realistic basis of the study,we focus on two core issues: the ultimate effect of political connection on the growth of the enterprise is the promotion or the suppression? This is the ultimate result of the impact of political connections on the enterprise growth.What is the way through which political relations affect enterprise growth? This is a discussion of the mechanism of the effect of political connection on the growth of enterprises.Through the theoretical derivation and combing the literatures,and Based on the logical analysis framework of “resource – enterprise behavior – growth”,this paper analyzes the effect mechanism of political connection on the enterprises growth as the logical foundation of constructing conceptual model.This mechanism can be simply described as follows: the impact of political connection on the enterprises growth may act through two paths,namely,direct impact and intermediary impact.And the intermediary effects attributed to the combined effectiveness of the three intermediary paths —Scale expansion effect,scope expansion effect and efficiency loss effect.The final outcome of the impact of political connection on enterprises growth depends on the combined effect of the two paths.Based on the influence mechanism of the political connection on the enterprises growth,this paper constructs the conceptual model of the research after determining the variables of scale expansion,scope expansion and Efficiency loss.Then,the relationship between the variables and the measurement methods of the variables are determined,and the corresponding theoretical assumptions are put forward.After several sample screening,the collected data is processed twice to obtain the specific values of each variable.Then,the characteristics of the grouped samples based on political connection and industry type are described by statistical methods,and the research variables are statistically described and analyzed on correlation.The regression and hypothesis test of this study adopts the fixed effect model of econometrics,and the multiple linear regression of the panel data is carried out,and the proposed hypothesis is tested one by one,then discuss the hypothesis test results.It is concluded that political connection has a negative impact on the enterprises growth.The scale expansion effect has a positive mediating role in the influence of political connection on the growth enterprises.The scope expansion effect has a negative mediating role in the influence of political connection on the enterprises growth.The efficiency loss effect has a negative intermediary effect in the influence of political connection on the enterprise growth.Since the negative mediating effects of the scope expansion effect and the efficiency loss effect are smaller than the positive mediating effect of the scale expansion effect,the combined effect of the scale expansion,the scope expansion and the efficiency loss plays a partial positive intermediary role in this process,thus we can conclude that there are other ways to influence the political connection on the enterprise growth.After discussing the research results,it puts forward some management implications for the enterprise: the enterprise should pay attention to the match between the political strategy and the enterprise resource under the premise of giving full play to the economies of scale;the political connection can not be regarded as the same as the enterprise core competence of the training.The innovation and theoretical contribution of the research is that the indicators in the evaluation system adopt growth rate in order to reflect the dynamic change of the enterprise growth;it is a new attempt to carry on a comprehensive study of the paths on which the political connection affects the enterprise growth;the conclusion of the study has a certain role in promoting the mechanism of political connection affecting the enterprises growth.At the same time,the limitations of the study are as follows: the measurement and selection of certain variables need to be improved;although the study has a positive effect on the mechanism of political connection affecting the enterprises growth,but the conclusion is not perfect.Based on the above,the author puts forward the following prospect for the research of political connection and enterprise growth: the research difficulties of this field are still more scientific measurement on political relations;other paths on which political connection affect enterprise growth are waiting to be tapped;Is there a “reverse choice” between political connection and enterprise performance or growth? Whether the performance or the enterprise growth will affect the enterprise political rent-seeking behavior,may become a new perspective in the field of research.