The Influence Of Executive Political Association On Enterprise Technological Innovation

In today's world,a new round of technological revolution and industrial revolution has brought the world into a new big change.Facing the new trend and opportunities of technological innovation,many countries regard technological innovation as the core of the strategy.When it comes to enhance our capability of independent innovation,the key is to encourage enterprises to increase investment in R & D.Small and mediumsized enterprises have the characteristics of high density of knowledge,which is an important force that cannot be ignored in our country's innovation ability and economic development.However,because of the high uncertainty of small and medium enterprises which incurs the constraints of external resources,the development and innovation of small and medium-sized enterprises are restricted.Political connection refers to the informal and special relationship between enterprises and government or individuals with political power.Under the background of China's transition to market economy,small and medium-sized entrepreneurs are more interested in political connections because of the frequent intervention of local governments in the discrimination of enterprises and private economy itself.Therefore,from the perspective of political connection,it is of great theoretical and practical significance to study the influencing factors of technological innovation of Chinese private enterprises in the transformation period.This paper analyzes the political connection influence mechanism of enterprise technological innovation,because of short-term political relationship and its instability,enterprises in order to timely use of political connection advantage will be more choice to implement short-term projects.Therefore,the high risk,long cycle of technological innovation activities in this case is not the dominant choice of enterprises.In order to maximize profits in the short term,companies tend to high performance sensitivity compensation plans to motivate executives,this arrangement reduces their ability to bear the risk,make them become more willing to choose the risk averse behavior rather than innovation.In addition,this paper selects data from 282 listed companies on gem for 2012-2015 years,and uses panel regression to empirically study the effect of executives' political connections on technological innovation of enterprises.The results show that: executives' political connections have a negative inhibitory effect on enterprise's innovation input,and this effect will not change after considering the heterogeneity of enterprises.Besides,the existence of executives' political connections significantly reduced the output of technological innovation,and the negative impact is more obvious in state-owned enterprises.Meanwhile,for the above scale enterprises,the impact of executives' political connections on technological innovation output is not significant.In general,whether from the angle of input or output,the enterprises with the characteristics of senior executives' political relevance have a low intensity of technological innovation.Therefore,this paper argues that when China's economic reform has not yet been completed,the central government should bring innovation indicators into the assessment of officials selection mechanism,so that local governments can change their involvement in business activities.At the same time,we should accelerate the pace of reform,and lay stress on the construction of a fair and reasonable external system,so that the market can decide the allocation of all kinds of resources and reduce the profits gained from political connections.For the enterprises,they must adjust the expected revenue and cost brought by executives' political connections,reduce dependence on the government according to the development of external environment,and focus on building up their long-term competitiveness through technological innovation.Meanwhile,the enterprises must establish an incentive system to promote technological innovation within the enterprise,liberate executives from non productive activities,maximize their entrepreneurial spirit,and make technological innovation the fundamental of enterprise development.