The Empirical Study On Political Connection, Social Trust And Bond Financing Of Private Enterprises

Embedding theory thinks that enterprise is embedded in the social network, so the enterprise's financing behavior is affected by both formal system factors and informal institutional factors. Existing researches on the influence factors of corporate financing in our country are mostly focus on formal institutional factors impact, ignoring the consideration to the informal institutional factors. In recent years, with the development of China's corporate bond market and the increasing of bond financing tool types, especially short-term financing bonds, corporate bonds and medium-term notes, bonds tools provide greater choice spaces for of private enterprises direct financing. Under the background of developing the enterprise bond market in China, it is necessary to explore all kinds of informal institutional factors affect corporate bond financing. Existing theory study has found that social trust as the core elements of social capital has an important influence to enterprise's financing behavior. Trust capital which enterprise gradually accumulated in long-term economic activities can enhance the ability of enterprises to obtain bank credit funds. At the same time, in such a "relational" society in China, political relations resources play a positive role in promoting credit financing to the private enterprise. So in the transformation of the economic system in our country, as the different types of social capital of private enterprises, it is worthy to further research the impact on corporate bond financing of special political relationship and common social trust capital role. Different from the existing researches on the influence factors of enterprises credit financing, this article will focus to informal institutional factors influencing bond financing of private enterprises. On the base of respectively research the influence of trust capital and political relations on financing scale and financing deadline of private enterprises, further explore the interaction relationship between the special political relations capital and the general social trust capital in financing.Study adopts the method of empirical analysis. Take the listed private enterprises which have financed in the enterprise bonds market in our country as the research object. In addition to respectively test the influence of political connection and social trust to private enterprises' bond scale and duration, the research also has a further inspection of the interaction influence between political connection and social trust. Use the SPSS 17.0 to analyze the collected data and the empirical results show below information. Firstly, the resource of political connection and social trust can help private enterprises in financing through corporate bonds. Secondly, there are interaction influence between political connection and social trust in the influence on private enterprise bond issuance i.e. the effect of social trust for private enterprise in bond financing is smaller when the private enterprise has the resource of political connection. Thirdly, political connection and social trust can help private enterprises to issuing short-term financing tools. The research results reflect the instrumental utility of the private enterprise's social capital in obtaining scarce economic resources. So under the background of economic transition, we should foster private enterprise to develop social capital through correctly guidance and specific system.