Study On The Correlation Between Political Connection And The Listed Companies' Financing Capacity

The capital is the first and continuously impetus for an enterprises' activities.It is important for an enterprise if there is a stable source of funding and whether it can raise adequate production fund.Nowadays,the economic situation is critical,and the dificulty in gaining investment is greater for many enterprises.The problem of structured finance is found more and more serious and brings obvious polarization.How to improve finance ability is not only a problem of the enterprise,but also an important construction work of the capital market in China.Many researches found that political connection would affect the enterprise's capital structure,reduce the cost of financing and ease the financial restraint,meanwhile the politically connected companies would change their financing mode and use the capital structure with high financial leverage.it seems that more and more companies keen on establish political connection and the correlation between political and financing capacity of enterprise is becoming a hot issue in the field of economics,political science,finance theory and strategic management.Many scholars are in the light of the private enterprises,the small and medium-sized enterprises when they researching the political connection of our country.More scholars choosed to research the influence of political connection on corporate performance or credit financing and other debt financing,and there's a case of inconsistent conclusions.This text is starting from the mechanism of political connection,and based on information asymmetry theory and rent seeking theory.It collected the annual data of 1651 companies witch listed on A shares in China in 2010-2014,and sorted out the political connection of these companies for the past five years.With the method called a combination of theoretical research and empirical research,"the positive influence of political connection on corporate financing ability,and the role of political association will be different because of the defferece of the property right of enterprises and the intensity to the industry that the company is in was regulated is verified,In the last part,it put forward reasonable policy suggestions based on the research conclusion in the light of the problems in financing status and financing process of the current listing Corporations in China.On one side,it enriched the related research of political connection and financing ability.On the other hand,it provides an empirical reference for enterprises how to improve financing ability by using of good government and enterprise relations rationaly.