Political Connection, Government Intervention And Enterprise Environment Performance

The Roman Club published a report named<THE LIMITS TO GROWTH> in 1972, which gave the first warning to the traditional development mode, and this report also took profound considerations about the traditional industrial civilization characteristic with high consumption of energy and heavy pollutions firstly.China is in a historical stage of economic reformation and social transition; during which government intervention could be seen everywhere, the relationship between the enterprise and the government is closed linked with the development of an enterprise. Different relationship may lead to discrepant competitiveness and superiorities. The non-state-controlled Publicity Company generally formed its political connection using two ways, the founder and other executives were elected deputy to the NPC or member of the national committee of CPPCC because they make great contribution to the local economy and the enterprise employed government officials, deputies to the NPC and political advisors to work in this company because the founder realized the importance of political connection. The state-controlled Publicity Company formed its political more directly, for the executives themselves were government officials.Political connection could influence the operation of an enterprise in many aspects, this paper mainly discusses its enterprise environment performance influence, and there are very few authors have studied the relationship between political connection and environment performance. Political connection with different ownership has varied function, for the state-controlled Publicity Company, environmental protection department may soft their rules, which lead to a bad environment performance, and When it comes to the non-state-controlled Publicity Company, the founder put much attention to the prestige they and their enterprise build in the community, they think highly of their enterprise's socioemotional wealth, non-state-controlled Publicity Company would like to invest more capital to protect the environment, so political connection has a positive correlation with environment performance. This paper chosen the companies come from Shanghai and Shenzhen stock markets during the year 2004-2009, which should be focused verification by environmental protection bureau as our samples. Empirical analyses support our hypothesizes, the political connection of state-controlled publicity company has a negative correlation with environment performance, the political connection of non-state-controlled publicity company has a positive correlation with environment performance, and non-state-controlled publicity company does better then state-controlled publicity company. The empirical analyses also show that marketization index has a positive correlation with enterprise environment performance; the independent director's proportion of state-controlled publicity company has a positive correlation with enterprise environment performance; Debt-to-assets ratio of non-state-controlled publicity company has a positive correlation with enterprise environment performance.