Political Connections and Enterprise Performance of Private Enterprises in China: Impacts and Mechanisms

Yang Wen and Guo Feng

International Journal of Economics and Finance, 2020, vol. 12, issue 10, 86

Abstract: Researchers have not come to an agreement on the impact of political connection on enterprise performance although this issue draws much attention. This paper attributes the above phenomenon to lack of precise classification of various political connection types in China. Based on existing literature, this paper divides political connections into current political connections and former political connections, and identifies their own hierarchy. Empirical study using Chinese Private Enterprise Survey data shows that different sorts of political connections all contribute to enterprise performance, and internal governance plays the mediating role. Overall, this paper may make marginal contributions to the study on the relationship between political connections and enterprise performance.

Date: 2020
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