Political Connections, Financial Constraints and Long-term Growth

Haoxiang Tong, Boya Yu, Jing Wu and Guanping Zhou

Journal of Applied Finance & Banking, 2020, vol. 10, issue 2, 4

Abstract: This paper takes Chinese private listed companies as a sample to study the impact of political connections on financial constraints and long-term growth. The study found that political connections can help companies ease financial constraints and help companies to enlarge scale. However, the easing of financial constraints has not helped companies to improve their innovation capabilities and operating efficiency. On the contrary, political connections have caused a decline in companies’ potential long-term growth.  JEL classification numbers: D92, P16 Keywords: Political connections, Private listed company, Financial constraints, Long-term growth

Date: 2020
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