Politicalassociation,technological Innovation And Enterprise Value

As China’s socialist market economy continues to develop deeply, China’s economic reform has made great progress. Under this circumstance, private enterprises were developing and getting benefits from the economic system. However, the system for private enterprises was far from perfect due to some limitations such as resources access difficulties, market access restrictions and so on. In this predicament, many private enterprises adopted a measure of political association for the sake of gaining access to more resources and opportunities for the benefits of enterprise survival and development. At the same time in the background of "public entrepreneurship and innovation”, private enterprises as an important body of technological innovation investment, technological innovation is undoubtedly important decisions of private enterprises. The former literature have political association as an important research study, but they have not study the impact of political connections on technological innovation, thus lack a valuable path in which the political association affect enterprise value. At the same time most of the literature focused on political association can help companies to get government resources, and then promoting enterprise value, and a few studies have found that the political relevance harmed the value of the business. However, they are not able to answer the means by which to enhance the enterprises’ value.This article deduces that political association has a effect of increasing enterprise value, technology innovation enhances this effect, and then executes an empirical analysis per samples of China’s private listed companies data from year 2010 to year2014. By theoretical analysis and empirical test, below conclusions is derived:(1) by investing in the social relationship capital of political association, private enterprises obtain some government relative preferential policies, and the implicit relational contract with government can be for their economic income, political association hasenterprise value effect.(2)Private enterprises with political association have positive roles in promoting their technical innovation, and they invest in innovation more actively.(3)Technological innovation has partially intermediary effects between political connection and enterprise value.This paper studies the impact of political association on technology innovation capability and enterprise value. Researching the impact of political connection on technical innovation and technical efficiency enhance our understanding of the inherent mechanism of the political connection to corporate behavior and performance,deep the technical innovation theory and will help to open up a new field of study for the theoretical studies of the impact of political connections on firm value.