Research On The Path Of Political Connection Heterogeneity On Corporate Investment Efficiency

Among the many factors that affect the efficiency of corporate investment,Among the many factors that affect the efficiency of corporate investment,political connections play a crucial role.There are two kinds of controversies about how the political connection affects the investment efficiency in the existing literature: the efficiency hypothesis and the rent-seeking hypothesis.This is because there is no distinction between the types of political connections.In fact,different types of political connections have different characteristics.It may not be consistent to ignore the characteristics of different types of political connections on finding the impact of political connections on the efficiency of enterprise investment.In order to solve this problem,we distinguish two types of political connections based on ways of establishment and connecting entities,namely formal political connections and informal political connections.Taking J and S companies as examples,we use the dual-case comparative study method to explore the impact of the heterogeneity of formal and informal political connection on the enterprise investment efficiency and its path.It is found that the heterogeneity between different types of political connections will change the investment behavior of enterprises.And it makes enterprises with the formal political connections have higher investment efficiency,while enterprises with the informal political connections have lower investment efficiency.The research not only finds out the path and mechanism of the impact of political heterogeneity on the investment effect,but also establishes the theoretical framework of the path.The research results not only extend the boundary of the research on political connections but also provide theoretical guidance for establishing good government-enterprise relations and effectively improving corporate investment efficiency.