Associated With The Loan Term Structure Research Company Politics

The existing loan term structure research literature, mainly based on balance theory, agency cost hypothesis, information asymmetry hypothesis and tax hypothesis, and mainly used the factors of basic characteristics and corporate governance structure to analysis the loan term structure. The studies found that the scale of the company, the company investment opportunity, profitability, holding shareholder and information asymmetry problem would have effect on the loan term structure, but research has not pay attention to the effect of political connection on loan term structure. This article explains the relationship between political connection and different kinds of loan. Political connection, as a kind of guarantee, can improve the company’s credit to get loans, so it will become more convenient for company to get the long-term loans, and increase the loan term structure. Due to the existence of political association, the bank more inclined to establish a long-term relationship with the company, and the stable long-term loans is the best reflection of the relationship between company and banks.According to the analysis, political connection has different influence on the different types of loans. Thus, we put forward the following four hypothesizes: compared with the non-political connection enterprises, political connection company have more bank loans; Compared with non-political connection enterprises, political connection company have more long-term loans. The short-term loans of political and non-political company don’t have significant differences. Compared with non-political connection enterprises, the term structure of political connection company loan is longer.