An Analysis Of The Regional Differences Of Government 's Background On The Growth Of Companies In China' S Listed Companies

Previous studies showed that the experience of those company executives who had worked in the government office, or serve as the deputy to the National People’s Congress, the CPPCC members, is a "valuable resource", which will make them more effectively “communication” with government officials. To be more frankly, this effective communication can bring to the company tax incentives, financing facilities and other benefits both visible and invisible, positively affect the enterprise in a short term and also in the perspective of long term progress. Therefore, the government background of a company executive, as a key element when it comes to the process of obtaining social resources, to realize the value of the company, to achieve the goal of consecutively development of the company, is now gathering more and more sight since more and more company high managements realize the importance of it. As we think a little bit further about it based on the fact mentioned above, following question comes into our mind spontaneously: Growth Opportunity, function as the very fundamental source of power for the survival and development of all enterprises, whether it will be really affected by the executive government background?On the other hand, during the tough process of gradually transit from planned economic system to the market economy system in our country, affecting by region factors, police factors and imperfect factors, regional diversity become significantly conspicuous. Represented by Shanghai, Guangdong and other eastern coastal prosperous areas with higher degree of marketization, government intervention is less, so listed companies in these areas will have better developed market environment for the growth; while listed company in the Midwest are facing a much more worse situation where marketization level is low, the level of economic development is backward and the point which we care most: the relation between company and government is considerable much more complex compare to those booming are. Based on these analysis stated above, we really want to explore that under the situation of diversity region and policy environments, does the listing Corporation executives government background’s influence on enterprise growth will also be different in different region areas? Thus, we believe, from the aspect of financial geography theories, by the means of detailed theoretical analysis and empirical research on the relation between listed company executives background and company growth, form a perspective of regional and market environment diversity, could benefit in the future when coordinate of regional development, improve the functions of the government, improve the corporate governance structure which has a positive and far reaching influence.As beginning, concepts are defined and stated of what is considered as government background, what should be considered as best index to measure the Growth Opportunity of a company. Basic theory of corporate growth factors is also reviewed. Secondly, summarizes the existing research on the relationship between company executives’ government background and the Growth Opportunity of a company. In the theoretical analysis part, summarizes the mechanism of how executives of listed company’s government background influence the Growth Opportunity of a company. Another key point is, why the influence of government background on Growth Opportunity is different rely on region factor. In the empirical analysis. Firstly, it analyzes the specific effects of government background on the growth of the company, secondly, through cluster analysis based on two indicators disclosed in "China Market index: Market Relative Progress Report by Region(2011)," prepared by Fan Gang, Wang Lu and Zhu Hengpeng, to divide regional areas in China(31 provinces, municipalities except Tibet). As per data, utilize the data of China A-share listed companies without Financial Company, petroleum and petrochemical company in between year 2010 to year 2015. Through the establishment of multiple linear regression model, empirical test and analysis for the differences in affection of government background on Growth Opportunity. Summarizes the conclusion for the research.Through the combination of theoretical and empirical research, this paper concluded that:(1) Government background of executives of listed companies has significant positive effect on the company’s Growth Opportunity; the regional differences of executives of listed company’s government background’s influence of company’s Growth Opportunity exist.(2) In the area where market development degree is low, with heavier level of government intervention, the government background of executives for the company’s growth roles more obviously. In this paper, from the aspect of financial geography theories, based on the relationship between government background of company executives and the Growth Opportunity of company, hope can contribute to the research in this field.(3) Compared to those regions where the impact of the executive government background on the company’s growth is not significant, the company’s overall growth is worse.