Impacts of Political Connections on Private Enterprise Performance in China and the Analysis of Mediating Effects

Yang Wen

International Journal of Economics and Finance, 2020, vol. 12, issue 11, 28

Abstract: Based on data of Chinese Private Enterprises Survey (CPES) from 2006-2014, this paper uses OLS model and other empirical methods to estimate the impacts of political connections on private enterprise performance in China, as well as heterogeneous effects and mediating effects of different types of political connections on tax burden and non-productive activities expense. The results show that, political connections contribute significantly to private enterprises. Compared with previous political connections, like working experiences in state-owned enterprises and government-affiliated institutions, current political connections, like deputies to the NPC or members of CPPCC, have played better and further roles in enterprise performance. Tax burden and non-productive activities expense have a mediation effect in the relationship between political connections and enterprise performance. This study replenishes new evidence to describe how political connections affect private enterprise performance in China, and partly explains why private enterprises are keen on setting up political connections, which may provide valuable tips to foster a new type of cordial and clean relationship between government and business in China.

Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.ccsenet.org/journal/index.php/ijef/article/download/0/0/43881/46139 (application/pdf)
http://www.ccsenet.org/journal/index.php/ijef/article/view/0/43881 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ibn:ijefaa:v:12:y:2020:i:11:p:28

Access Statistics for this article

More articles in International Journal of Economics and Finance from Canadian Center of Science and Education Contact information at EDIRC.
Bibliographic data for series maintained by Canadian Center of Science and Education ().