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Political Connections and Growth of Enterprises
YANG Qi-jing
2010, (6):
38-43.
DOI:
Under the China’s style of decentralization,the local governments are not only granted huge discretion on the local affair but also hold many resources that can be used to help enterprises.This induces the enterprises emphasizing on political connections.On one side,the political connections can benefit the enterprises,especially the private enterprises by the ownership protection,deregulation and even cheep public resources.However,on the other side,political connects might seriously restrict the growth of enterprises.It is not only that the core capability and healthy corporate governance are depressed,but also much rent is dissipated.So,we need to reform ownership,to relax regulations,to strength the competition in order to reduce the negative effects of political connections.
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