The Study On The Inlfuence Of Political Relationships To Capital Structure Of Private Enterprise

Since the concept of political relationships has been proposed in the nineteen eighties, many scholars point out that the corporate political relations have effect on the enterprise value, enterprise performance, financing, taxation, government subsidies and other aspects. Research shows that political relation is more suitable to the countries or regions with non-perfect law and system, in these places can better embody the system background difference. And if the management and nature of the corporate is different, the influence on the enterprise is not the same. Our country is in the economic transition period with emerging market characteristic, it is very valuable for me to study the corporate political relationships in our country.Because our country legal system is not perfect, and the financial enterprises have attached much importance to the state-owned enterprise, the private enterprises employ the executive with political background to solve the financing problem. This paper studied how the political relations affect private enterprises capital structure in our country. This paper proofed that political relations can bring many of the benefits for the private enterprise with a scientific view, and draws some new conclusions.Based on the private listed companies as the research object, this article researches the relationship between the political relation and the capital structure of private listed companies by established regression model and used the method of empirical testing. Firstly, this paper discusses the theory of political relationships and capital structure theory. And then, this paper screens the private listed companies with political relationships by the information of private listed companies in2010, selected the related capital structure influence factor as the control variable, then builds multivariate regression model. At last, this paper analysis the correlated variables, and uses the Pearson correlation coefficient method to eliminate variables of Multicollinearity, and this paper analysis the filtered variable correlation and the model multiple linear regression.Through the analysis, this paper draws the following main conclusions:(1) There are50.05%private listed companies have political relationships, one political relationship is led by the government; the other is led by enterprise, who establishes political relationships with the government initiatively.(2) The regression coefficients of corporate political relationships with the total debt ratio, long-term debt financing rate are significant, show that political relationships can bring debt financing and long-term debt financing for the enterprise; Political relationships to the enterprise’s internal financing have no effect.(3) Political relationships and the regional development comprehensive index have negative correlation, it confirmed that the area development level is lower, the political relationships to replace the formal system is stronger.(4) Political relationships to ownership concentration have no significant influence; political relationships and enterprise tradable shares have certain positive correlation.(5)The main financing source of private listed companies in China is not debt, even if the debt financing also mainly rely on the current liabilities, long-term debt ratio is very low in enterprises.