Political Association, Financial Subsidies And Corporate Performance

Under the background of the global financial crisis, the current world economiccompetition is escalating, and so many shortcomings are exposed by the market in theallocation of resources. Financial subsidies have become an important means forgovernments to regulate the operation of the economy. Focal point of the currentdomestic and foreign scholars study is financial subsidies for social justice and theimpact of enterprise innovation, however, the effects of fiscal subsidies on enterpriseperformance is little. As is known to all, enterprise managers entrusted by the ownermanage the enterprise’s production and decision-making, and the level of managementdecisions has an important influence on enterprise performance. In recent years, seniorenterprise’s managers of various countries actively participate in political activities thathave become a universal phenomenon. The political background of executives become ahot issue and has been widely concerned.Since the reform and Opening-up, the market economy rely mainly on theself-regulation in our socialist market economy, the government has reduced the degreeof intervention. At the same time because of the imperfect institutional environment ofChinese market, it can not fully consistent with the Modern Corporation management,therefore, political connection can remedy the defects of market in a way. Typically,corporate political strategies have a significant impact on the sustainable managementof enterprises. At present, although research on political association and enterpriseperformance are enormous, so far, political association of motivation established byenterprise and political association is how to change the business performance, and soon, these problems have not yet reached a unified conclusion.The research sample of this title is based on2007-2012China’s A-shares listedcorporation, and the explanatory variables are the financial subsidies and enterpriseperformance, multiple linear regression model is established. The main tasks of thispaper are to explain the following questions: Whether political connection has access tofinancial subsidies, the effects of different levels of political connections on theperformance of enterprises; political association whether can improve the performanceof enterprises or not; effect of different levels of political relation on enterpriseperformance; in consideration of the fiscal subsidy factor, political connection how toaffect the performance of enterprises.