An Empirical Study On Political Connection Of Listed Companies And The Government R&D Subsidies

The government of the enterprise R&D subsidies is a common phenomenon in the countries of the world. The government R&D subsidies have a very important role in promoting enterprise R&D investment, improving enterprise technological innovation and enhancing national competitive ability. At present, domestic and foreign scholars conducted more research on the allocation efficiency of R&D subsidies, the R&D subsidy policies and the enterprise R&D investment effect, little research on the deep-seated reasons for enterprise to obtain government R&D subsidies, what factors influence the government to enterprise’s subsidy? Along with people to the political connection attention rise, some scholars examined the relationship between political connection and enterprise R&D investment, however, the research of political connection through which form influences the enterprise R&D investment is very little, and this will need to study.Now our country is in the process of economic transformation, China’s listed companies are relatively common existence of the phenomenon of political connection. Many studies show that, enterprise and government to establish political connection can not only effectively protect property rights of enterprises, but also can give enterprise to bring the bank loans, preferential tax, regulated industries to enter and other benefits. For government R&D subsidies by the government-led activities, whether in the actual operation of the process will be affected by enterprise political connection? Considering the influence of political connection, whether we can find a reasonable explanation for R&D subsidy to enterprise R&D investment effects of uncertainty? Based on the above issues, this article from the perspective of political connection on the company to obtain the government R&D subsidies conducted an empirical study. Thus trying to explain the deep motivation of the government R&D subsidies, and looking for the deep-seated factors influencing the relationship between R&D subsidy and enterprise R&D investment.This article based on2004-2007China’s Shanghai and Shenzhen A-share listed companies as research samples, by collecting and sorting the listed company executive resume, and measured the company’s political connection. By constructing linear regression model to examine the impact of political connection of the company to obtain government R&D subsidies, and further examines the institutional environment on the relationship between political connection and the government R&D subsidies influence. Finally, the paper discussed the role of political connection factors, the impact of the government R&D subsidies to the company R&D investment.The conclusions of this study as follows:(1)Political connection has significant influence on obtaining government R&D subsidies. Specific performance for politically connected companies can obtain more government R&D subsidies than no politically connected companies.(2) Government intervention, financial market level and legal system level has significant influenced the relationship between political connection and the government R&D subsidies. Specific performance in distinguishing the government intervention of the high degree of region and government intervention degree is relatively low region, the company’s political connection can make the company get more government R&D subsidies in the severely interfered area; political connection has no longer significant influence on government R&D subsidies in the lightly interfered area. Identically, in the lower level area of financial market, the company’s political connection can make the company get more government R&D subsidies, in the higher level area of financial market, the result is not significant. In the legal system, compared to a higher level of the legal system area, the role of the company’s political connection to obtain government R&D subsidies is more obvious in the legal system of higher level area.(3)Political connection would significantly affect the relationship between the government R&D subsidies and company R&D investment. Specific performance in the company has no political connection, the government R&D subsidies has a significant positive impact on company R&D investment. While the company has political connection, the impact of the government subsidies to the company R&D investment is not significant. For political connection companies, the role of R&D subsidies to promote the company’s R&D investment is no longer obvious. Thus, explained that political connection will weaken the positive influence of the government R&D subsidies to the company R&D investment.