The Impact Of Political Relevance On Leverage Ratio Of Listed Family Firms Under External Impact

China is in a period of economic transformation and institutional transformation,and problems such as imperfect market mechanisms and immature institutional norms still exist.The government holds the right to allocate key resources,which leads enterprises to actively seek to establish political connections in order to adapt to the market environment.Political connections,as an informal institutional arrangement in developing countries,can bring financing convenience to enterprises.However,this impact will be impacted by different external environments.In recent years,anti-corruption policies and the COVID-19 have had a significant impact on the survival and development of Chinese enterprises.Firstly,since the 18 th National Congress of the Communist Party of China,the central government has continuously implemented a high-intensity anti-corruption policy,which has achieved fruitful results in the fight against corruption through institutional reforms.With the normalization of anti-corruption policies,the construction of political connections in family businesses and the ability of political connections to carry resources are all affected.Secondly,since the end of 2019,the outbreak of the COVID-19 has brought huge economic losses to Chinese enterprises,damaged the production and marketing chain,and threatened the survival and development of enterprises.At this point,political connections play an undeniable role in the financing of enterprises,helping them alleviate the pressure on the capital chain and overcome difficulties.Based on the above considerations,this paper first combs and analyzes the domestic and foreign literature and data on enterprise leverage ratio,political connections,anti-corruption policies,and the COVID-19,and reviews relevant research;Secondly,it defines the connotation of enterprise leverage ratio and political connection,and deduces the research hypothesis of this paper based on the enterprise life cycle theory,information asymmetry theory,relationship financing theory,resource dependence theory,industrial organization and rent-seeking theory;Thirdly,under the impact of the external environment,according to the different characteristics of the family business,the impact of the interaction of external shocks and political connections on the leverage ratio ratio of the enterprise was discussed,and the empirical analysis was conducted using the multiple difference method,and the robustness test and heterogeneity analysis were completed;Finally,policy recommendations are proposed based on empirical conclusions.This article takes A-share listed family companies from 2008 to 2022 as research samples to empirically study the relationship between external shocks,political connections,and corporate financing.The research conclusions are as follows: First,the political connection of family businesses has a certain role in promoting the leverage ratio of enterprises.Second,under the impact of different external environments,the political connection of family businesses has different effects on the leverage ratio ratio of enterprises.Anti corruption policies will inhibit the positive promotion of political connection on the leverage ratio ratio of enterprises,while epidemic impact will strengthen the positive promotion of political connection on the leverage ratio ratio of enterprises.This means that under the impact of the anticorruption campaign,the role of political linkages in promoting enterprises’ leverage ratio has weakened.On the contrary,under the impact of the epidemic,political linkages can enable enterprises to continue to improve their leverage ratio and expand their financing capacity,helping enterprises overcome difficulties.Third,the heterogeneity analysis study further analyzes the impact of political linkages on leverage ratio ratio of family businesses from the perspective of enterprise life cycle,market competition and regional financial development level.This article proposes policy recommendations from both micro and macro perspectives.From a micro perspective,it is recommended that enterprises improve their financial management mechanisms and enhance their information disclosure efforts,in order to alleviate their financing constraints and suppress their motivation to manipulate leverage.From a macro perspective,when enterprises respond to external environmental shocks,the government should ensure the stability of economic policies and improve policy transparency,effectively safeguarding the survival and development of enterprises,and thereby stabilizing the macro economy.