Study On The Managers’ Political Association Affect The Value Of Enterprises

The activities of the government has a very important role in the growth of enterprises,it will make some relevant regulations and economic measures to regulate the behavior of theenterprise. In particular, China as the largest developing country in the world. Although aftermany years of reform and development, and has established the market economic system, thegovernment in the allocation of resources in the strong position remains unshakable and itholds numerous scarce resources. At the same time, due to the transition of China’s specialeconomic regime, the market environment of the enterprise can’t completely adapt to theeconomical model of governance. Therefore, the government still plays an irreplaceable rolein the market.Executives as the company’s management, business strategy makers, their level ofeducation, occupation and political connection degree will influence the realization ofenterprise value. Managers’ political connections on the value of the enterprise in recent yearshas attracted the attention of the academic circles. It is based on the executives personalimpact the company’s operations, decision-making as the carrier of the relationship betweenresources. Political association executives through his own with relational resources toinfluence the development and implementation of the government’s economic policy. Andthen for the company to strive for higher corporate value has become a generally acceptedview in academia. Many enterprises pay more and more attention to the development andimplementation of the political measures in the current increasingly intense marketcompetition to defeat the opponent. It has also become the important content of theirlong-term development of the concept and corporate strategic management.In today’s society, enterprises’ political association is a universal phenomenon in theeconomic development of various countries. A large number of listing corporation executiveswith government background, and this trend continues to develop. About the enterprise toseek political association reason, scholars generally agree that it is the relatively backwardfinancial development, low level of legal system, imperfect market mechanism and a weaker property protection for an alternative mechanism. Alternative to the market mechanism,however, does not fully explain the enterprises to seek political association. One of the moreobvious fact is, with the development of our country market economy, the increasingly fiercecompetition constantly promote enterprise from exterior to gain competitive advantage. It isthe important reason of enterprises to establish a political phenomenon has attracted more andmore attention. In general, the enterprise can be affected by the macro policies, laws andregulations, industry management policy restrict, or by direct government intervention orleadership. Government procurement in the market will develop market standards or marketnorms, and thus to maintain market order, economic management functions. And thegovernment in the market to buy some public works can show the important role ofgovernment in relationship with the enterprises. As can be seen from the analysis of therelationship between the government and enterprises, regardless of the point at which one, thegovernment will have a significant impact on the survival and development of enterprises.This is some company executives reason why the establishment of a political association ofthe important reasons. The relationship between the government and enterprises is animportant issue facing the transformation of China’s economic system, while the study of therelationship between government and enterprises mode and its efficiency is an urgent need tostudy. Therefore, the study of managers’ political connections of the impact on corporatevalue is of great significance.Innovation of research perspective and content is presented in this paper. Before thescholars of political association study of the impact of enterprise value most is the study oflisted companies in our country privately operated enterprise, the industry has not yet todistinguish to research this problem. This article is the study of the Shanghai manufacturinglisted companies in China to study political association executive influence on enterprisevalue. Manufacturing is the dominant sector of the country’s economic growth and economictransformation. The basis of economic and social development as an important, it directlyreflects the level of productivity of a country and it is a perfectly competitive industry, so thisarticle chooses manufacturing industry is more meaningful research. This article researchresults will provide reference for the construction of manufacturing listed companies associated political basis. Also to have the innovation in the sample selection. The currentdomestic and foreign relevant research in measure whether the enterprise has a politicalassociation, mainly limited to the analysis of the chairman and general manager is measuredby political background, without considering the background of the other senior executives oflisted companies may also is a kind of political resources for enterprises. This paper studiesthe top10senior political relevance of listed companies, can better reaction listed companiespolitical associated with the enterprise value.This paper selects2076sample firms from2007to2011were analyzed by descriptivestatistics and Spearman correlation analysis. Based on the data of the descriptive statisticalanalysis, we found that by year of manufacturing listing corporation executives politicalassociation on the value of the enterprise is decreased year by year. Divided by area executivepolitical connection on the value of the enterprise is the eastern area is the lowest, mid area isrelatively higher, the highest is the western regions. Statistics showed that by the nature of theownership of the controlling shareholder, political association of the state-controlled listedcompany executives is greater than the political association of the non-state-owned holdingexecutives of listed companies. The data regression analysis results can be seen, the Shanghaimanufacturing listing corporation executives political association and enterprise value issignificantly negative correlation. Through empirical research and analysis of the company’sexecutives political connection on the value of the enterprise. Making the government,manufacturing listing corporation leaders and other corporate interests has more rational andcomprehensive understanding about political association. And provide certain theoreticalreference for the reform of the government-enterprise relations, healthy development of listedcompanies in the manufacturing sector.