A Study Of The Correlation Between Political Connection And Over-investment In Private Listed Companies In China

In the context of the system of transition economy,political connection as a supplementary mechanism of one of the non-institutional factor,is an important factor affecting the excessive investment of enterprises.In China,the government's ability to intervene in scarce resources is very strong,significantly affecting business activities.Unlike state-owned enterprises,the development of private enterprises is limited by many factors,and there is an urgent need to maintain close contact with the government to improve the external resources and environment.This paper chooses the private listed companies of Shanghai and Shenzhen A shares from 2013 to 2015 as the initial sample,constructing the political connection system from the three levels of political association existence,political degree and intensity and political connection type,and analyzing the political association of private listed companies in China,and the following conclusions:(1)the political connection will indeed lead to excessive investment in private enterprises in China,to promote their excessive investment level;(2)further,the degree of political relevance significantly promote the excessive investment in private enterprises;(3)the intensity of political connection will not increase the excessive investment of private enterprises,the two were not significant positive correlation,that is,private enterprises over-investment level;(4)the result of further distinguishing the type of political connection shows that the independent director's political connection does not play a governance effect,but it promotes the over-investment of private enterprises,but this effect is not conducive to the increase of political connection significantly.(5)Other senior political connection will increase the excessive investment of private enterprises,showing a significant positive correlation.The other senior political connection will increase the private enterprises'over-investment level,showing a significant positive correlation.The over-investment of private enterprises will be more serious with the establishment of other senior political connection.