The Impact Of Enterprise Political Connections Stability On Its Innovation Performance

China is in period of economic transition,with incomplete laws and institutions,and underdeveloped market infrastructure,such as capital,labor and product markets.The government still plays an important role in resource allocation and economic opportunities.Therefore,many enterprises choose to establish political connections with the government in order to obtain the key resources needed for innovation development of enterprises.However,the relationship between an enterprise and the government may change over time and events.In the development process,enterprises may establish new political connections or cut off existing political connections,which will lead to unstable political connections.Then,What is the impact of firm’s political connections stability on innovation performance? Do different industries have the same effect? Are there any differences in the influence of political connections on different types of innovation performance?In view of the above research questions,we took a sample of 2,458 listed companies from 2009 to 2017 to investigate the influence of political connections stability on enterprise innovation.We found that the political connections stability in different industries has different effects on firm innovation performance.There is an inverted U-shaped relationship between the political connections stability and innovation performance of the company in high-tech industry,and a negative relationship between political connections stability and innovation performance of the company in non-high-tech industry.The political connections stability has different effects on different types of innovation.The political connections stability is negatively correlated with breakthrough innovation performance and an inverted U-shaped with incremental innovation performance.We expand the related research on political connection by examining the impact of political connections stability on firm innovation from a dynamic perspective.We distinguish the influence of the political connections stability in different industries on firm innovation performance and the influence of the political connections stability on different types of innovation performance,which enrich the relevant literature on the relationship between political connections and innovation.At the same time,this study provides a reference for enterprises with political connections to maintain the relationship with the government to promote the innovation and development of enterprises.