The Connection Between Political Association And The IPO Process

China’s market economy is developing rapidly and its rules are improving constantly. Increasing competition encouraged companies dig their own potential, and pay more attention in seeking competitive advantage from the outside. Previous studies have proved that the political relevance in developing countries and countries in economic transition period is most obvious. And China as the largest developing country, economic activity is in transition period, the enterprise of political association also is particularly important, as the private enterprises have become an increasingly important position in the national economy is bound to be seeking political resources protection. In this paper, based on domestic and foreign research about the company’s political association, based in China’s special institutional environment, combined with political cost theory, rent-seeking theory, resource dependence theory and other theoretical basis, We explore the IPO process of China’s private companies and the relationship between the political association, and verify the company’s political association whether can affect private listed company’s share price and company size.This paper takes 2013 private listed companies in china stock market as research samples, analyzed the status quo of political association of the private listed companies, And uses the linear regression model, study the influence of political association for IPO process, the results show that private listed company which have political association have faster IPO process than those have no political association of the company. In further research, We found that these political association cannot affect the stock price after company listed, But can promote the scale of the company. On the other hand, companies which have no political association pursuit of political background excessively will slow down the process of IPO. The research of this paper expand the study of the theory of the political association in domestic and foreign. And provides the empirical basis and reference to the study of connection between Political association and company’s IPO process in China.