Political Connection, Diversification Strategy And R&d Investment Research Of China’s Private Listed Companies

After 30 years development of reform and opening up, China’s economy had a rapid growth, in 2010 the total GDP for the first time surpassed Japan to become the world’s second largest economy. But in our country, low-tech industries accounted for a large part, China’s economy in order to maintain rapid and healthy growth should improve the ability of technology innovation, and comprehensively improve scientific and technological strength. But now in the micro level of the enterprise, the enthusiasm of Chinese enterprises to invest in R&D is not high, investment intensity is low, in this way, insufficient R&D investment to the private enterprise has become one of the biggest challenges of improve the ability of technology innovation in our country.The rapid growth of China’s economy and the insufficient R&D investment are difficult to explain from formal financial and legal system, therefore, some scholars have gradually transferred to the "relationship" research, to keep an eye on the political connection behavior of the enterprise. This perspective has its rationality, because our country’s economy is still in a transition period, the government functions are gradually changing, but the country’s political system determines the Chinese government still has a very important role in the allocation of the resources in the market. Non-market system is inefficiency and uneven in the allocation of resources, this encourages enterprises seeking to establish political connections with the government, so as to obtain more resources, and also can avoid the risk of external uncertainties brought to the enterprise to a certain extent.This paper reviews the domestic and foreign relevant research, on the basis of combing and summarized the relevant literatures, we construct the theoretical framework of political connection and enterprise R&D investment relationship. We combed the internal mechanism and effects of the relationship between the political connection, diversification strategy and enterprise’s R&D investment, formed the multi-level study system of the impact of political connection to enterprise R&D investment. And then we take an empirical test about how political connection affects the enterprise’s R&D investment, the samples are enterprises from Shenzhen small and medium-size(SME) board listed companies from 2009 to 2012. Through theoretical analysis and empirical test, this paper mainly draws the following conclusions: political connection of enterprise has significant negative impact on R&D investment; The stronger the political connection is, the greater the negative impact on R&D investment of the enterprise; Nonlinear study shows that political connection with R&D investment is u-shaped relationship, namely, within certain limits, political connection is a negative influence to R&D investment, after more than a certain value, the political connection positive influence the R&D investment; The corporate with diversified strategy political connection more negative impact on R&D investment; Compared to the implementation of the unrelated diversification, the implementation of related diversification corporate political association more negative impact on R&D investment.This study realize the innovation in the following areas, first of all, the idea of studying the technological innovation of enterprises from the perspective of political connection is novel; Secondly, based on the framework of "resources-strategyperformance" joined the diversification strategy to analysis, testing enterprise resources how to act enterprise’s R&D investment activities through different strategic choices.This paper proposes the following policy recommendations according to the theoretical analysis and empirical test: to accelerate the construction process of marketization and to reduce the direct government intervention in the economy, which make market play a basic role in the allocation of resources; Enterprises should reduce the investment about rent-seeking, overcome "short-sighted" problem, increase the enterprise’s R&D investment, promote the technology innovation, so that enterprises will have more long-term competitiveness. This is also the practice meaning of this article, that is, to provide a basis for the authorities making policy to promote enterprise R&D investment, to provide decision-making reference for the enterprise’s strategic choice abort political connection, diversification strategy and innovation strategy.