Study On Political Connection And The Growth Of Family Business

The internal family relationship and external political connections of family business are analyzed in this paper for the purpose of discussing how the political connections influence the decision-making process of the entrepreneurs and the performance of the family firms. It is chosen to be the core subject because of its practical significance for family business. The definitions of political connections and institutional environment are given in this paper, and the related theories on political connection motivations and social capital are reviewed. In the main parts of this paper, the change of the nature about the political connections held by the family firms is analyzed first; A model is established to explain the related factors that influencing the family firms' political connections from the perspective of microeconomics subsequently, and intergenerational transmission of the political connections is also displayed in this paper; Finally, correlative study of the factors mentioned above is tested in the empirical methods with the data from the Ninth Survey on Private Enterprises in China.In this paper, theoretical analysis is combined with empirical analysis methods, and the following conclusions are reached:First, political connections are established in family business in order to meet the changing institutional environment; the nature of political connections is closely related to the institutional environment. This can be reflected from the change of institutional environment in China. The efficiency costing rent-seeking behavior gradually turned into the win-win mode. Second, there is significant negative correlation between the direct political connection and the market-oriented institutional environment. Third, entrepreneur acts as an important role in the coordinating process of the vertical social network in family business. In addition, during the intergenerational succession of social capital, the transmission of political connections often comes as the last one.