The Effect Of Political Connection On Companies Performance

Enterprises through the establishment of political connections and government topursue the improvement of company performance, is the world’s widespreadphenomenon. Globally, there are different ways of different countries to establishpolitical connections, and the root cause of the difference is each country has its ownunique institutional environment. This text set about from the establishment of thepolitical connections,deeply analyzes characteristic of the Chinese institutionalenvironment, and institutional environment’s impact on corporate performance in Chinaespecially the impact on the performance of private enterprises. Research shows that thedifferent rights subject to the enterprise needs the allocation of scarce resources capacityis different, our government has a crucial role on the allocation of resources, and thepeople’s congress and political consultative conference, on resource distribution functionis weak, the enterprise survival and development needs resources, has the resourcesmight have performance. Based on this analysis, this paper want to try to explore thefollowing answers to two questions:(1) Enterprises to establish political connections canimprove company performance;(2) Compared with members of the people’s congress,the government background of the enterprise is in the company’s performance increase ifthey can play a greater role. To answer the above questions, we selected2384samplesfrom2009to2011to establish the related model and empirical test, the samples from theactual control of man-made personal a-share private listed companies. The empiricalresults show that the actual control of private listed companies political connections andfirm performance are related; Private enterprise government background influence onfirm performance more prominent than the commission.