Political Connection And Enterprise Innovation

In order to enhance the core competitiveness of enterprises and build an innovative country,it is inevitable to foster enterprise's capacity for innovation,which still needs to be improved.An economy's political environment has an important influence on the growth of enterprises."Political centralization and economic decentralization"is our country's feature,so that private company is eager to have connections with government,political connection may bring preferential privileges,but it may also damage the ability of long-term development of enterprises.Taking A-share private listed companies in 2007-2014 as samples,by means of negative binomial regression and poisson pseudo maximum likelihood regression,this thesis studies the influence of political connection on enterprise's innovation.Taking into account the factors that affect the decision making in real life,this thesis also analyzes the moderating effects of competitive pressure from the product market and earnings forecast pressure from the capital market.This thesis consists of six parts.The first chapter is the introduction,this chapter explains the research background and significance,then illustrates the content and methods,and finally describes the research ideas and framework.The second chapter is literature review.This chapter makes a review of the literatures which include enterprise innovation,political connection and its impact on enterprise innovation,and then puts forward the research direction.The third chapter is the research hypothesis.In this chapter,we analyze the way in which political connection has a negative impact on innovation and the positive moderate roles of the product competitive pressure and earnings forecast pressure,and bring up three hypotheses.The fourth chapter is the research design,this chapter explains the sample selection basis,data sources and empirical models,and gives the definition of relevant variables.The fifth chapter is the empirical analysis.Through descriptive statistics,correlation test,negative binomial regression,poisson pseudo maximum likelihood regression and robust test program,three hypotheses are analyzed.We also study the comprehensive regulation role of product competitive pressure and earnings forecast pressure by grouping research.Political connection misappropriates innovative resources,reduces the preference for innovation,and ultimately reduces innovation output of the company.Under the product competitive pressure and earnings forecast pressure,the negative impact of political connection on corporate innovation is strengthened.It shows that enterprise which is in financial distress or facing organizational decline may be inclined to improve the survival of enterprises through informal economic activities.The sixth chapter is the research conclusion and enlightenment,this chapter first summarizes the conclusion,and then explains the motivation of enterprise different behavior,discusses rent-seeking concept of political connection,and gives policy recommendations to encourage innovation,finally explains the advantages and disadvantages of this thesis.The innovation of this thesis is as follows:in the aspects of research content,this thesis enriches literature of "the impact of political connection on enterprise innovation".It illustrates the influence mechanism and analyzes the moderating roles of product competitive pressure and earnings forecast pressure,the existing literature rarely relates to the regulation effect,our research has improved the research level.In the aspects of research methods,when scholars take patents as agent variables of innovation output,they always uses the OLS model based on the natural logarithm of the number of patents,but patent quantity data belongs to count data,which has a poisson distribution and may be over dispersed.It may be more reasonable to use negative binomial model,this thesis uses negative binomial regression method,combined with poisson pseudo maximum likelihood regression,which are reasonable and innovative.The practical significance of this thesis is as follows:first,in December 2013,the Communist Party of China issued a document,under the instruction of this document,full time and part time behavior of the party and government cadres to enterprise was restricted,our study provides evidence that the cost of political conennection actually exists.Second,this thesis gives suggestions on improving our country's innovative ability,benefits brought by rent-seeking should be reduced and compensational structure should play a supportive role,then innovative entrepreneurs will gain more,so that they are willing to engage in more innovative activities.Forming a good innovative environment and regulating the relationship between government and entreprises are essential.