Political Connections, Enterprise Tax Burden And Corporation Value

Studies have shown that more and more private entrepreneurs participate in political life through the election of NPC deputies and being elected as members of the Chinese People's Political Consultative Conference.Some former government officials have also engaged in business with greater political influence.At the present stage,the political connection of enterprises is ubiquitous,and studying its impact on the enterprise is of great practical significance.Especially for private enterprises,for unlike state-owned enterprises which are usually born with passive government background,they often actively seek political connections and though which they can get franchising,tax breaks,more loans or other scarce resources.Based on the theoretical basis,this paper analyzes the influence mechanism of political connection,enterprise tax burden and enterprise value.Based on this,the paper chooses the data of A-share listed private-owned enterprises from 2010 to 2014 and puts forward three hypotheses,and then established a corresponding empirical model for multiple linear regression,respectively exploring the impact of listed private-owned enterprises with political connection on corporate tax burden,the impact of political connection on corporate value.Then,the enterprise political connection is subdivided into the NPC deputies and non-deputies to regress respectively.And in the end,we introduce the channel test to explore whether the political connection will affect the corporate value by affecting corporate tax burden.From the study,we can get these conclusions:(1)The political connection of the board of directors and the executive in private listed companies can significantly reduce the corporate tax burden,of which the political background of the NPC deputies is more significant for the tax reduction effect;(2)Political connections can effectively enhance corporate value;(3)Political connection does not affect corporate value by influencing corporate tax burden,but affect it through other channels.