Political Connection,internal Control And Corporate Performance

In the current era of economic transformation and upgrading,the market plays a vital role in the development of enterprises.However,the political connection of enterprises also affects the development of enterprises.Especially for private enterprises,they are not as close to the government as state-owned enterprises.At the same time,most resources are controlled by the government.Therefore,in order to pursue better benefits,many private enterprises generally actively establish political connections.Hire someone with a government background as a senior executive of the business to get more resources to improve business performance.As an important system within an enterprise,internal control has always been an important prerequisite for the normal operation of an enterprise.Since the release of the Basic Standards for Enterprise Internal Control,internal control has become a research hot spot in academia.This article explores its relationship to corporate performance from two aspects,political connection and internal control,and conducts an empirical analysis based on data from private enterprises.At the beginning of this article,first,through theoretical analysis of existing literature,the relationship between corporate political connections and corporate performance,the relationship between internal control and corporate performance,and the interaction between political linkage and internal control and the relationship between corporate performance are studied.Then,the article selects private enterprises from 2014 to 2018 as the research object,and uses the method of empirical research to verify the conclusions obtained in the previous article.In the empirical process,we classify the performance of the explanatory variables,use the return on net assets to represent the short-term performance of the company,and use the Tobin Q value to represent the long-term performance of the company.Impact.It is concluded that the performance of companies with political connections is higher than that of companies without political connections;the performance of companies with more complete internal control is higher than that of companies with weaker internal control;the interaction between political connections and internal control on corporate performance The effect appears to be a substitute effect in the short term,and a regulatory effect in the long term.Based on the above theoretical analysis and empirical research,this article puts forward related suggestions for empirical results.First,private enterprises should strengthen their internal control system.Second,political affiliation plays a role that cannot be ignored in the operation and development of private enterprises.Private enterprises must rationally treat this phenomenon.Third,the government should strengthen the construction and improvement of relevant laws and regulations in the field of internal control of enterprises,strengthen the implementation of internal control by enterprises,force companies to disclose their internal control reports,and strengthen external supervision of enterprises.Fourth,the government should increase support for private enterprises.