Political Performance Demands, Official Tenure And Corporate Investment

In recent years,China’s economy has entered a new mode,showing excessive investment and overcapacity.As one of the biggest contributor to economic growth,investment has aroused wide public concern.This paper selects the Chinese officials’ governance system,and studies the influence of local officials on corporate investment from perspectives of political achievement demand of official and officials’ tenure.This paper studies how the Chinese system plays a role in China’s economy from the micro level,and this paper contributes to the research on the officials’ governance system and economic growth in the field of institutional economics.At the same time,this paper also hopes to provide some direction and advice for solving China’s overinvestment problem.This paper uses data of non-financial listed companies from 2007 to 2016,and the data have 2545 individuals and 16414 samples.This paper empirically tests the impact of political achievement demand of official and officials’ tenure on corporate investment.This paper divides political achievement demand of official into political achievements demand and economic achievement demand.Finally,this article draws the following conclusions.(1)the political achievement demand of local officials will promote corporate investment spending,and reduce the corporate investment efficiency;(2)the length of officials’ tenure limit the influence of political achievement demand of official on corporate investment,corporate investment was mainly affected by political demands in officials’ short tenure,corporate investment mainly affected by the economic demands in officials’ long tenure;(3)officials’ tenure will increase the impact of political achievement demand of official on corporate investment.With the increase of officials’ tenure,the corporate investment expenditure will be more and the investment efficiency will be lower.(4)the investment of state-owned enterprises is more political demands,and private enterprise investment is more likely to be affected by economic demands.To avoid excessive government intervention in corporate investment problems this paper put forward the following Suggestions: First,the imbalance assessment model of China’s local officials’ system,such as unemployment index,GDP index,fiscal revenue index,is easy to cause imbalances development in economy,society and environment.This paper suggests that we will continue to improve the performance appraisal system of local officials,pay attention to the coordination of proportion among the examination content.Second,the short tenure of local officials caused local officials’ impetuous and seeking quick success.In order to avoid this kind of problems,this article suggested that strict enforcement of a five years system and set a minimum term of current position for campaign officials Third,the central government shall establish a corresponding system of regulating the relationship between local government and state-owned enterprises,to avoid local officials to intervene directly in the state-owned enterprises’ investment solving employment problems.Fourth,we will strictly monitor regional policies and control measures formulated by local governments,so as to avoid unreasonable interference by local officials in private enterprise investment.