Empirical Study On The Relationship Between Heterogeneous Political Relations Of Listed Companies And Corporate Performance

Since the implementation of the "dual-track system" development model in China in the 1980 s,the uncertain business environment and institutional factors have significantly affected the operating environment of listed companies.The government-enterprise relationship between government and enterprises plays a very important role in business management Whoever establishes a closer relationship with the government will be able to take advantage of the fierce market environment.As a result,political connections are also common in companies around the world.Based on this,scholars at home and abroad have paid close attention to this relationship.However,existing research results show that the relationship between political connection and corporate performance is divided.Some scholars believe that there is a positive promoting effect between the two;some scholars believe that there is a negative inhibitory effect between the two;some scholars believe that there is no correlation between the two.This article believes that the factors that affect the relationship between political associations and corporate performance may be the formation of political associations in different ways,or there may be no distinction between the types of corporate performance.Based on this,this article hopes to use heterogeneous political connections and different corporate performance as research breakthroughs.Political relations are divided into formal political relations and informal political relations.Corporate performance is divided into financial and innovation performance.For the study of the problem,this article adopts two methods.One is the literature research method,and the other is the empirical research method.Two-sided research was conducted by literature research.On the one hand,the review of rent-seeking theory,system theory,and innovation theory lays a solid theoretical foundation for research;On the other hand,sorting out the relevant research content and research methods of the predecessors,providing reference for the choice ofresearch direction and research method in this paper.Empirical research method is used to estimate and test the research problems.Based on data from 3,020 companies listed on the Shenzhen and Shanghai stock exchanges,this article uses a propensity score matching method and a treatment effect model to study the relationship between heterogeneous political connections and corporate performance.The research questions are as follows:(1)For listed companies,does the establishment of a formal political connection have a significant impact on the company's financial performance and innovation performance?(2)Does the establishment of informal political connections have a significant impact on corporate financial performance and innovation performance?(3)What is the difference between the impact of formal political connections and informal political connections on corporate financial performance and innovation performance?Estimation of research questions is made through propensity score matching method and processing effect model.The Rosenbaum boundary estimation method is used to test the stability of the processing effect,and finally relevant conclusions are drawn:(1)The formal political connection has a negative effect on the financial and innovation performance of listed companies.That is to say,compared with the companies that have not established a formal political connection,the financial and innovation performance of companies that already have this relationship are relatively poor(2)For listed companies,the effect of informal political associations on financial perforance is negative,that is,for improving financial performance,formal political connections have not only played a role in promoting,but have a restraining effect;(3)For informal political connections,the processing effect on corporate innovation performance is positive.It shows that for improving the innovation performance of enterprises,informal political connections can play a promoting role.(4)Compared with companies with informal political affiliation,the absolute value of formalpolitical affiliation's effect on financial performance is smaller.This shows that informal political connections have a greater negative impact on corporate financial performance.(5)The formal political connection has a negative effect on innovation performance,while the informal political connection has the opposite effect,and its processing effect is positive.