Empirical research on the effect of top management team’s political connection on enterprise value in China’s private listed companies

Author(s): Liu Baoping, Hu Shuai

In this paper, the problems to be solved are whether top management team’s political connection have effects on enterprise value in China Private Listed Companies. The significance of solving such problems is that enriching the domestic research theoretically and improving corporate governance practically. The core innovation in this research is that we classify the differences between central political connection and local political connection. The new part compared with previous work is that we summarize the way in which political connection affects corporate value through the analysis of a series of economic phenomena brought by political connection. Based on the above analysis, we get the hypothesis of this paper. To verify the proposed hypothesis of this paper, we select 1067 private listed companies as samples to research on and we get some significant conclusions: (1) Political connection have positive effect on the enterprise value of private listed companies; (2) Central political connection’s effect is more obvious than the local political connection on the enterprise value; (3) The higher the proportion of politically connected executives, the better enterprise value in private listed companies

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