Political Connection,Investment Efficiency And Corporate Performance

Chinese economic structure is undergoing transformation.The country's economic development has changed from the pursuit of speed to the pursuit of quality.Enterprises are micro-individuals and play a vital role in the country's economic development.Investment activities will not only affect the performance of enterprises at the micro level,but also affect the economic development of the macro level.Inefficient investment will affect the development of the enterprise,and the inaction or excessive action of the manager will hinder the development of the enterprise.However,due to the irrational corporate governance structure,many companies will make irrational investment decisions.When the internal mechanism system is unbalanced,companies often seek external help.In order to obtain scarce resources and to survive in the fierce market environment,companies will have a strong incentive to build relationships with the government.And political connection is this special relationship between government and enterprise.Political connections can bring rich resources to enterprises,which will affect their production and operations.Therefore,it is necessary to study the relationship between political connection,investment efficiency and corporate performance.This article takes the A-share listed companies from 2008 to 2017 as the research object,and examines the impact of political correlation on corporate performance,investment efficiency on corporate performance,political correlation on investment efficiency,and political correlation and investment efficiency.The effect of interactive items on corporate performance.In addition,the article refines the impact of the interaction items of political connection and investment efficiency on corporate performance from the perspective of market level and the nature of property rights.Empirical conclusions show that:(1)Political connection can improve corporate performance.(2)The inefficient investment of managers will inhibit the development of enterprises and reduce the performance of enterprises.(3)Political correlation is negatively related to corporate inefficiency investment,that is,political correlation will have a positive impact on investment efficiency.(4)The coefficient of the interaction term between political connection and inefficient investment is significantly positive,which shows that political connection can suppress the inefficient investment of the enterprise and have a positive impact on the performance of the enterprise.(5)The lower the market level of the region,the more the political connection of the enterprise can weaken the negative impact of inefficient investment on the performance of the enterprise.(6)Whether it is a state-owned enterprise or anon-state-owned enterprise,political connections can reduce the negative impact of non-efficient investment on enterprise performance.However,compared with state-owned enterprises,the more political connections of non-state-owned enterprises can weaken the negative impact of non-efficient investment on corporate performance.The research conclusions of this paper support the effective view of political connection on resource allocation,and provide reference opinions for the government to improve the external institutional environment and establish a reasonable political strategy for enterprises.