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Government Trust,Political Connections And Economic Performance Of The Private Enterprise

Posted on:2018-11-25Degree:MasterType:Thesis
Country:ChinaCandidate:Y X GongFull Text:PDF
GTID:2336330512990696Subject:Financial
Abstract/Summary:PDF Full Text Request
Nowadays,China is in an important economic transition period.On one hand,the Private enterprise hope to build political connections to acquire more enterprises competitive advantage,more investment program and higher social reputation under the operating pressure.It's 'efficiency hypothesis 'about political connection.On the other hand,Due to the strength of the 'anti-corruption' continued in the government,the private enterprise owner who is building political connections is also suffering high cost and rent-seeking risk.It is also about two relatively mature political connections studies:'political cost hypothesis' and 'rent-seeking hypothesis'.However,even the enterprise without political connections is also linked to the government,the policy of the government or attitude of the officials will change the owners' evaluation of the government.There is no research about the effect of enterprise owner's subjective attitude on the management benefit.The information founded about the government trust are some articles and only a little monographs in other countries.So,no matter what aspects,theoretical or empirical,it is worth to do further research in this areas.This article attempt to discuss the effect of political connections and government trust of the private enterprise on their management benefit.Using the data from China household finance survey(CHFS)in 2015,we judging political connections by whether the owner of the private enterprise used to be a government worker,or whether his/her parents used to be a government worker,or whether his/her other family members used to be a government worker.By setting up 'list test' to calculate the relatively objective government trust.Different from previous study,we measure management benefit from loan size,tax preference and profitability,so that we may find out the reason of the previous different research conclusions about the effect of political connections on management benefit.This article main conclusions are as follows:Firstly,'efficiency hypothesis' and'rent-seeking hypothesis' are both rational,but different aspects of management benefit have different conclusions.Secondly,to verify the 'efficiency hypothesis'political connected companies will have more social resources to get more borrowing,so it's easy for financing.Thirdly,according to the 'rent-seeking hypothesis' because political connections companied with a 'rent-seeking cost',it need more 'debt of gratitude',then cause the lower corporate earnings.Fourth,government trust was actually defined as a principal-agent relationship between the public and the government by way of administrative power,government trust may accompanied with trust risk.,and such kind of risk will influence the business.Over government trust may enhance 'the agent sovereignty' of government officials which have more information resources,then the enterprise will suffer from some disadvantages.
Keywords/Search Tags:Government Trust, Political Connections, Principal-agent, Economic performance
PDF Full Text Request
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