Political Connections And Corporate Foreign Direct Investment Performance

Starting from the realistic background of the “Belt and Road” proposal,this paper points out that China's special development stage and characteristic institutional environment determine that foreign direct investment of Chinese enterprises is affected by government and policy guidance.This paper conducts indepth research and discussion on the impact of political connections on the performance of foreign direct investment of enterprises.It is divided into theoretical and empirical research,short-term performance and long-term performance.It finds the "double-edged sword" of political connection to performance.After the impact,the adjustment function of the market system environment and the optimization function of the corporate governance structure were introduced,and the role of the "double-edged sword" was deeply analyzed.The research has theoretical and practical significance.Theoretical research to construct mathematical model,pointing out that external financing convenience is a channel for political association to influence investment performance.Political association can improve the approval rate and provide preferential policies by alleviating information asymmetry in external financing.The method of providing implicit guarantees makes it easier for enterprises to obtain external financing,thus affecting the performance of foreign direct investment.Due to the principal-agent problem,political correlation has positive and negative results for investment performance.Its impact is determined by the market institutional environment and corporate governance structure.The empirical research is divided into two dimensions: short-term performance and long-term performance.The sample data of Chinese enterprises' foreign direct investment in 2015-2017 is used,and the intercourse items are introduced to study the influence of political connections on the performance of foreign direct investment of enterprises and the results of decision-making.factor.The study finds that the external financing convenience is the way of political connection to the performance of foreign direct investment of enterprises;the market system environment(capital market,product market)has a regulating effect on it,the market system environment is good,and the political connection guides the mismatch of funds.Less,the possibility that enterprises that are under-invested are financed through political connections will increase,and thus the impact of political connections on corporate foreign direct investment is positive;corporate governance structure(corporate structure,R&D capabilities,executive characteristics)optimizes them.For enterprises with low corporate governance structure,of foreign direct investment will be expanded.Among them,the market system environment has a significant decisive effect on short-term and long-term performance,and the corporate governance structure only has a significant decisive effect on long-term performance.This paper studies the impact of government-enterprise relations on enterprises,so it has certain practical value for the future implementation of foreign direct investment and the government's foreign direct investment policy.On the one hand,for enterprises,while maintaining political connections,maintaining the independence of corporate decision-making and improving the level of corporate governance structure,thereby helping enterprises to obtain certain benefits through political connections,while not being affected by the negative effects of political connections;On the other hand,for the government,it is possible to reduce the phenomenon of rent-seeking and corruption by improving the market system environment,so that the political link,which is the direction of the “double-edged sword”,can play a positive role,so that the encouragement policy of overseas investment can play its role.