Research On The Impact Of Executive Political Connections On Bank Loan Contracts

Based on the fact that bank loans are easy to obtain and will not lead to dilution of equity,the signing of bank loan contracts will have a greater impact on the financing decisions and value management of enterprises.When making credit decisions,banks not only judge the profitability and solvency of enterprises based on the accounting information provided by enterprises,but “political and business relations” has become another necessary means for enterprises to obtain loans from banks.To develop a socialist market economy,the "new-style political-business relationship" of "pro" and "clear" has become the focus of attention of all sectors of society.In order to further deepen the understanding of "political and business relations" and promote its better service for the future development of enterprises,this paper takes the credit activities of banks as the background,and takes the 2013-2017 Shanghai A-share non-financial listed companies as research objects.The political background of the chairman and general manager uses the dummy variable method to define “political connections” and uses the four variables “new loan”,“short-term loan ratio”,“long-term loan ratio” and “loan term structure” to measure “banking”.The loan contract examines the impact of executive political connections on bank loan contracts,and further studies the need for credit conflicts between banks and shareholders as a creditor for executives' political connections and executives' political connections to corporate debt default risks.effect.The results of the study confirm that:(1)The political relationship of executives can reduce the difficulty for enterprises to obtain loans,effectively expand the scale of loans provided by banks for enterprises,extend the term of loans,and in the enterprises with high debt default risk,executives are politically connected to banks.The loan contract will have a greater impact.(2)In the process of signing the bank loan contract,the conflict of interest between the company's shareholders and the bank as the creditor will have a strong demand for the political relationship of the executives,and the political relationship of the executives can indeed play a role in reducing the risk of corporate debt default.This paper introduces the "Zscore" variable that can measure the risk of corporate debt default when studying the influence of executive political association on bank loan contract,and further examines the difference between this kind of influence in different enterprises,enriching the "political business" Related researchresults of the relationship.