Enterprise Political Connection And Technological Innovation

Since the reform and opening to the outside world in 1978,China has made remarkable achievements in many aspects,and the economy has developed rapidly,but it has also encountered many serious problems.The level of innovation in the whole society is slightly insufficient.Cultivating innovative enterprises,improving the overall level of innovation and promoting the healthy development of the economy is the only way for China to become a powerful country in the economic field.All kinds of innovative behaviors of enterprises are greatly influenced by the government's incentive policies.Therefore,it is necessary for the government to encourage enterprises to make more innovations.In addition to the internal market drivers,enterprises need to encourage and guide the enterprises in their innovation activities.In the context of economic transformation and imperfect market system,the political connections of senior executives will bring incentive policy support to enterprises,such as financial subsidies and tax incentives.The circumstance of enterprises will be improved because of the existence of political connections.In order to obtain sufficient resources,enterprises are strongly willing to seek contacts with the government and creating a political background to better survive and develop in order to obtain sufficient resources.Therefore,the relationship between enterprises and government has become a common phenomenon.As a common social phenomenon,seeking political connection in the world today has become a hot topic for scholars at home and abroad.China,as the largest developing country and the second largest economy in the world,is in the key period of the transformation of the market economy,exploring the shadow of the political connections of enterprises to technological innovation.It has a certain theoretical and practical significance.Therefore,from the perspective of corporate executives' political connections,this paper explores the impact of political connections on technological innovation input and its impact path.First of all,this paper reviews the domestic and foreign related literature of the investment in enterprise political and technological innovation,and finds that most of the existing literature holds that political connections have a direct impact on the investment and output of technological innovation in enterprises,but some scholars' results suggest that the impact may be indirect,that is,There is a possible indirect way of influence between the two.In addition,some studies explain the internal path of the impact of political connections on technological innovation through the introduction ofintellectual property protection,external bad environment financing,R&D investment and external institutional environment.Then according to the existing theories,the author analyses the possible influence factors of political connections on technological innovation.The result shows that the factor is tax incentive,and the intermediary effect of tax incentive is further studied.Then,using the firm panel data of 489 listed companies on the Shenzhen stock market for 2010-2015 years,this paper uses the fixed effect model to test the above mediating effect.The results of the empirical study show that:(1)the political connections of senior managers of private enterprises have a significant positive impact on the investment of enterprises' technological innovation;(2)tax incentives play a part of intermediary role in the impact of private enterprise political connections on R&D investment.Considering the problems caused by the sample selection bias,we further test the robustness of the empirical study by PSM.Finally,according to the conclusions of the study,the relevant policy suggestions are put forward:(1)private enterprises can maintain a good relationship with the government under the premise of compliance with the laws and regulations,actively use political connections,so as to obtain more funds,some information about the government's macro policy and market control direction.(2)The government should use tax incentives and other relevant fiscal policy tools to encourage private enterprises to increase investment in technological innovation at the right time.