Does The Political Association Impact The Economic Consequence Of The Chinese Real Estate Private Listed Enterprises?

Under the reform and opening-up policy,the market economy has highly developed,however,a mature system of intellectual property protection mechanism and a complete law system to protect investor has not kept up with the economic growth.In fact,the government intervene the economy so much that it monopolizes the key resources.As a result,many companies cannot get those resources through formal market.The appearance of seeking-rent explains the reason why those companies try every means to keep the relationship with the government.Political connection is a alternative mechanism of a formal system during the imperfect market,playing an supportive role in debt financing,government subsidies,tax preference and so on.However,on the other side,it will increase the cost of the company in terms of the size and cost of employees and charitable donation.Based on the resource dependence theory,rent-seeking theory and the theory of political cost,this article uses the method to measures the political connection.If the directors,supervisors or management of the company are the member of Deputy to the People's Congress,the cppcc and the government,this company will belongs to the company with political connection.Through summarizing and comparing the situations related with politics home and abroad,this thesis mainly focus on real estate companies and give a conclusion from an industry aspect with a combined way theoretically and practically.The conclusions are that the political relationship will benefit the company in various aspects which lie in government subsidies and debt financing whilst it will burden the company in terms of the size and cost of employees and charitable donation.The performance of politically related companies is better than those without the political relation.Based on the theoretical analysis of the industry,two companies have been selected to make comparisons in order to analyze the effect of the political connection on economic consequence and if there is any difference of the effect between two companies.Thus,the aforesaid conclusions can be verified.In addition to the results of the size of the employee and the cost of employee compensation,the results of the case study differ from the whole sample study.Other findings are similar to those of the case study.