The Empirical Research Of Executives’ Political Connections To The Effect Of Private Enterprise Performance

With the rapid development of the global economy and the competition getting moreintensifies of worldwide enterprise, enterprises in different countries pay more attention tothe analysis of the impact of enterprise performance factors for the survival anddevelopment, political connections is the area of research focus recently. There is still nomore unified conclusion about the studies of the political connection to the influence ofenterprise performance. Combined with the special background of social and economicsystems as well as the trend of the development of China’s private enterprises, the researchof political connections is particularly important. This paper attempts to start from thebackground of political connections of private corporate executives, study the effect oncorporate performance from the politics connections, which of the two perspectives ofcorporate performance through government grants and bank loans positive analysis inorder to find the underlying reasons that affect the performance of private companies forcorporate executives in deciding whether to undertake the investment of politicalconnections to provide a reference.In the background of executives’ political connections of the private enterprises, studythe association between political connections with corporate performance, the mainpurpose is through screening and construct a suitable description of the model and sampleclassification method to establish a research methods of quantitative measure of therelationship between political connections with corporate performance, and by this way todetermine the impact of political connections on corporate performance.Firstly, on the basis of studying existing literature on how to determine thebackground of politics connections, proposed four assumptions about political connectionsof private enterprises get government subsidies and bank loans, as well as the impact ofgovernment subsidies and bank loans on firm performance, the purpose is to explore theimpact of private enterprises executives with political connections background in corporateperformance. Secondly, on the assumptions, to establish models of multiple regression and logistic regression to test assumptions. Finally, verify the impact of firm performance fromthe background of private enterprises executives’ politics connections by means ofdescriptive statistics and correlation analysis and regression models analysis on privateenterprises’ sample data.According to the results of the regression analysis in the sample data of private listedcompanies showed that: political connections can help enterprises to get more governmentgrants and bank loans, The better political connection may enable enterprises to get moregovernment grants, bank loans. Government subsidies, bank loans decided to ensureenterprise efficiency with sufficient operating funds. Therefore political connections havepositive impact on firm performance.