Institutional Constraints,Political Connections And Enterprise Technological Innovation Investment

Our country has been trying to explore the combination of effective government and effective market.Internal control of administrative institutions,as one of the links,also plays a direct or indirect role in the construction of an effective market.In order to establish a political system connected with the economic transition and reform the public sector represented by administrative institutions,the state began to implement the"Internal Control Standards of Administrative Institutions(Trial)" since 2014.The policy is a useful exploration in the combination of government and efficient market construction.So,will this control for administrative institutions have an impact on the development of market enterprises,especially on enterprise innovation?And by what means?Under the background of the implementation of the policy,this paper studies the chain mechanism of the influence of the internal control of administrative institutions on the technological innovation of private enterprises on the GEM by taking the political connection as the link.The results show that the existence of political connection squeezes out the firm’s technological innovation;And the internal control of administrative institutions promotes enterprise innovation investment by increasing the associated cost and reducing the power of political associated enterprises.Specifically,this paper takes the gem of China private listed companies from 2010 to 2019 as samples,the regression test the influence of political association of enterprise technology innovation investment,combined with the double difference model to carry out the administrative institutions of the role of internal control policy research,think that the strengthening of internal control of administrative institution played a rent-seeking block effect,Thereby increasing the cost of political association;At the same time,it also brings into play the effect of agency cost governance,thus reducing the power of political association,and finally improving the level of innovation investment of politically associated enterprises.The results show that:(1)Political affiliations bring"political baggage" to firms and hinder firms’ innovation investment.(2)Compared with non-politically related enterprises,the internal control of administrative institutions significantly improves the innovation investment level of politically related enterprises.In other words,the strengthening of internal control of administrative institutions reduces the "political burden" brought by political association,and encourages enterprises to improve the level of innovation investment.(3)The effect of internal control in administrative institutions is more significant in regions with low quality of internal control and low level of marketization.In the further research,this paper makes a preliminary analysis on the mechanism of political association and the internal control of administrative institutions to exert the governance effect,and holds that the internal control policy of administrative institutions may exert the effect of rent-seeking blocking and agency cost governance,so as to improve the innovation investment level of politically associated enterprises.From the innovative perspective of internal control of administrative institutions,this paper provides some directions for thinking about the internal relationship between the internal construction of promising government and the construction of effective market.Improvement of the current research focuses on the "political association rent-seeking" were discussed from the individual level of investment and financing of small and medium-sized enterprises,enterprise performance and the influence of the development,but this kind of association for small and medium-sized enterprises short-term behavior and efficiency of capital allocation caused by the society as a whole than less attention defect,perfecting the construction of service government of firm to the nation,We will put in place a sound and efficient system for social governance and operation,strengthen formal institutions such as market regulation,rules and regulations,and administrative oversight,and further provide important empirical support.