Research On Relationship Of Political Connection, Diversification Strategy And Corporate Performance In Family Enterprise

At present, China has entered into the transformation period, from Planned economyto Market economy, the government is still in a dominant position in the allocation ofresources in the community, at the same time, more difficult trade credit financing andhigher barriers to entry hinder the development of family enterprises. Therefore, in orderto get more resources and avoid the risk that from environmental uncertainty, companiesalways seek to build political association with the government. In China, politicalconnection is common.Based on the actual situation of Chinese political association and literature review,under the perspective of resource-based view, I build integrated analysis framework of theinternal mechanism and correlation about political association, diversification strategy andcorporate performance. Focuses on if the political relevance of our family enterprise is ableto establish an informal mechanism for transition economies under conditions of analternative system for missing and promote enterprise diversification, if diversificationstrategy really contribute to the achievement of corporate performance.This paper selects473family enterprise in Shanghai and Shenzhen A-share listedfrom2009-2011as a sample, using statistical methods for data analysis and hypothesistesting, mainly to get the following four conclusions: First, the political association of thecompany play a positive role on corporate performance; Second, the political associationcan facilitate the implementation of corporate diversification strategy, especiallynon-related diversification strategy; Third, diversification strategy and corporateperformance is positively correlated, including non-performance-related political pluralismwas significantly associated enterprises higher specialization and related diversification without political affiliates contrary; fourth, diversification strategy plays as interveningvariable in the internal mechanism of political connection to corporate performance.Political connection can improve enterprise’s ability of resource acquisition, which madethe enterprise resourceful, then using diversification strategy allocated resource to enhancecorporate performance.The conclusions above deepen the understanding of the influence that politicalconnection on enterprise growth, make a great exploration in the related research area.Meanwhile, in practice, the policy of this paper is that revelation: in the economictransition enterprises should pay attention to the accumulation of political capital, but alsoto keep up with politics "moderate" distance, effective political behavior and marketingstrategy to integrate, while the government in transition Enterprises should strengthen thestandardization of regulatory mechanisms and decision-making process.