The Impact Of Different Types Of Private Entrepreneurs’ Political Relations On Firm Performance

Good development of of private enterprises in China now is an important issue sinceit affects the long-term and lasting growth of Chinese private economy. In different stagesof their development, the necessary resources and problems facing are also different. Thesurvival issue of private enterprises’ succession is how to use leaders’ political relationshipto get innovative power of enterprise for sustainable development.By reading the relevant literature carding system, this study divide the politicalrelation of private entrepreneurs into the past political relations and existing politicalrelations which include politics, federations and other industry associations and partymembership relationship. Explore the mechanisms between these four relations andcorporate performance, as well as the regulatory role of soft power. The paper researchChinese private enterprises by analyzing secondary data to test hypothesesDrawing on the Eighth National Survey of Chinese Private Enterprises conducted bythe All-China Federation of Industry&Business and some other official organizations in2008, we found that the private entrepreneurs are most likely to get the relation ofFederation and other industry association membership which is the most available andmost conducive to enterprise performance, followed by politics relationship. And therelationship of the past political relation and Party members does not work on firmperformance. In addition, the paper also examines the regulation of soft power (socialstatus of entrepreneurs and corporate brand awareness) on different types of privateentrepreneurs’ political relations and corporate performance.The results showed that the social status of entrepreneurs play a regulatory role of therelationship between Federation membership and enterprise performance, as well as theparty and enterprise performance. In addition, corporate brand awareness plays aregulatory role of relationship between the past political relation and enterpriseperformance, as well as Federation membership and enterprise performance, the party and enterprise performance. Research findings have important guiding significance forChinese private enterprises to obtain superior corporate performance in the marketcompetition.