The Influence Of Political Connection And Diversification Strategy On The Performance Fluctuations

As a kind of special social capital,political connection is an important resource for enterprise development and has become a universal social phenomenon.This has also triggered the attention of many domestic and foreign scholars.However,previous studies mainly focus on the impact of political connections on the performance level,and neglect the performance volatility.It rarely reflects the stability of the company's operations and the ability to take risks.Based on this,this paper takes China's manufacturing listed companies as the research object,empirically testing the influence of political connections on the fluctuation of corporate performance and the intermediary effect of diversification strategies in it.At the same time,this paper also discusses the differential impact of institutional environment on the fluctuation of political related performance,and enriches the research perspective of the influence of political association.This paper selects the data of listed companies in China's manufacturing industry from 2011 to 2015 as the sample,analyzes the influence of political connections on the fluctuation of corporate performance,the intermediary effect of corporate diversification on the performance fluctuations,and explores whether this influence varies with the process of marketlization.The results of this study are as follows :(1)The chairman of the manufacturing company has a political relationship that is conducive to the diversification of enterprises,and the level of political association is positively related to the degree of diversification;(2)The existence of listed companies in the manufacturing industry Political connections can cause fluctuations in corporate performance,and the higher the level of political association,the greater the degree of fluctuations in the performance of the company;(3)Diversification plays an intermediary role in the influence of political connections on the fluctuation of corporate performance;(4)The process of marketization plays a negative regulatory role between political associations and corporate performance fluctuations.These conclusions further explain the influence of political association on corporate value,and provide some inspirations for enterprises to make diversification strategy decision and to implement it in different contexts.