Does The Deepening Of The Market Weaken The Role Of Political Association In Private Enterprises?

In the context of economic system reform,the problem of financing difficulties caused by institutional discrimination has always been a hindrance to the development of the private economy.In the process of China's economic transformation,private enterprises can not be protected by social systems and suffer serious losses.Therefore,private enterprises will solve the above problems through political connections.Along with the enthusiasm of private enterprises participating in the administration of state affairs,the influence of political connections on the development of private enterprises has also attracted more and more scholars' attention.In reality,the political connection as an informal mechanism of the market can facilitate the financing of private enterprises,so that the financing barriers of private enterprises are alleviated;But with the continuous deepening of the market,can the role of political association of private enterprises continue to maintain its original role? Does the loan effect of private enterprises continue to weaken as the market deepens? Although many literatures believe that the political relations of enterprises in transition countries have an important impact on the development of enterprises,whether the role of corporate political relations is weakened or disappeared dynamically with the system transition,the theoretical circles have not reached an agreement.One view is that as the market continues to deepen and economic freedom continues to increase,the economic development of transition countries depends more on the market,so political connections as social capital are bound to weaken;Another point of view is that as the market deepens and the economic aggregate increases,the government has more economic resources,so the role of political connections may not be weakened.Therefore,this paper attempts to analyze whether the loan effect of private enterprise political relations is dynamically weakened with the deepening of the market in the process of China's institutional transition from the theoretical and empirical perspectives.In theory,this paper first sorts out the related research on the effect of corporate political association loan,and puts forward the research theme of this paper on the basis of analysis.Secondly,this paper reveals the theoretical mechanism that the market deepens the dynamic change of the loan effect of the political relationship of private enterprises from the perspective of signal transmission effect,resource effect and regional property rights protection substitution effect: the information transmission effect shows that the political association enterprise loan effect The degree of information asymmetry decreases and shows dynamic weakening;the resource effect shows that the loan effect of politically-linked enterprises shows dynamic weakening due to the gradual ability of acquiring resources;the substitution effect of property rights protection shows that the loan effect of politically-linked enterprises is strengthened by property rights protection.Based on the above analysis,this paper proposes a research hypothesis: in the market deepening,the political-related loan effect of private enterprises shows a weakening trend.In the empirical aspect,this paper will study the sample of private enterprise data listed in 2003-2017,and try to test the dynamic changes of the market-oriented privatesector political relationship loan effect by analyzing the following two problems in empirical research design: First,in the sample period of empirical research,does the loan effect of political associations of private enterprises show a dynamic weakening trend? Second,if the political-related loan effect of private enterprises shows a dynamic weakening trend during the sample period,can this dynamic change trend be attributed to the deepening of Chinese market? The empirical results of this paper show that: firstly,during the sample period,the loan effect of political association of private enterprises shows a dynamic weakening trend.Secondly,during the sample period,the trend of the dynamic weakening of the political-related loan effect of private enterprises mainly comes from the improvement of the overall level of marketization.The innovation of the article lies in: First,the current scholars mainly pay attention to the loan effect brought by the political association of private enterprises to the enterprise,and the influence of the government tax preferential effect and subsidy effect is limited to the static perspective.This paper starts from the listed private enterprises,based on the signal transmission effect,resource effect and property protection effect,explores the dynamic characteristics of the political-related loan effect from a dynamic perspective,realizes the innovation of the research content and political connection research perspective,and expands the political connection literature.Second,although the theoretical circles all believe that the political relations of enterprises in transition countries have an important impact on the development of enterprises,whether the role of corporate political relations is weakened or disappeared dynamically with the system transition,the theoretical circles have not reached an agreement.This paper explores the dynamic characteristics of the political association loan effect of private enterprises,and can provide empirical evidence from the world's largest transition economies for the above theoretical disputes.