Research On The Influence Of Political Connection On EVA Performance In Chinese Enterprises

Under the background of the continuous development of economic globalization,with the participation of Chinese enterprises in the international competition,increasing the international influence and sustainable development ability have become important tasks for Chinese enterprises' development.As a pillar force of China's economic development,central enterprises play a good leading role in guiding the management of central enterprises to change their business philosophy from profit oriented to value oriented,and change their investment decision-making behavior.In 2010,the SASAC introduced EVA performance appraisal into the assessment of central enterprises.At the same time,more and more private enterprises begin to pay attention to the value creation and use the EVA performance appraisal.The resource effect of political connection can bring financing advantages to enterprises,help them better control macro policies,enjoy tax relief and benefits,and obtain support from relevant resources,so that enterprises can obtain more resource advantages for their operation and development,to a certain extent,it can improve the profits and reduce the capital cost of enterprises.From the perspective of companies,this will help enterprises to improve the performance of EVA.However,while enhancing the political connection,enterprises should take into account the moderating effect of the heterogeneity of political connection on the relationship between political connection degree and EVA performance.At the same time,diversification strategy has always been a means for enterprises to enhance their competitiveness.The business scope of enterprises involves many fields to disperse business risks,and corporate strategy will have an impact on the business objectives of enterprises,the ways and results to achieve the established objectives.Therefore,this paper will start from the political connection of the enterprise,study the influence of the political connection on the EVA performance,and discuss the influence of the political connection degree on the EVA performance under the regulation of “heterogeneity of political connection” and “diversification strategy”.This paper uses the method of combination of theoretical research and empirical analysis to explore the impact of the proportion of directors and supervisors with political connection on EVA performance under the adjustment of “political connection heterogeneity” and “diversification strategy”,taking 1143 listed of manufacturing industry A-share companies as samples from 2012 to 2016.It aims to improve EVA performance for Chinese enterprises and provide a certain theoretical basis of creating values for shareholders.According to this study,the main conclusions are as follows:(1)Political connection has a positive effect on EVA performance.With the increase of political connection degree,that is,the proportion of directors and supervisors with political connection increases,EVA performance can increase gradually;(2)The heterogeneity of political connection plays a negative role in the relationship between the political connection degree and EVA performance.That is to say,with the increase of the heterogeneity of political connection,the positive effect of political connection on the EVA performance decreases gradually;(3)The degree of diversification plays a negative role in the relationship between the political connection degree and EVA performance.That is to say,with the improvement of the degree of diversification,the positive effect of political connection on the EVA performance gradually weakens.