Have Political Connections Promoted Enterprises to"Going Global"?——Evidence from Chinese Private Listed Companies
In a transition economy,political connections,as informal institutions,can affect the survival and development of enterprises in many ways.Using the data of Chinese private listed companies from 2008 to 2017,this paper empirically examines the effects of political connections on outward foreign direct investment of enterprises.The results show that politically connected companies are more inclined towards serving the do-mestic market,which overall hinders their ability to engage in OFDI,especially when facing high external po-litical and economic policy uncertainty.Further research reveals that political connections not only can ease the financing constraints of enterprises but also can create more favorable contract enforcement environments for enterprises,thus partially offsetting their negative effect on firms'OFDI.Therefore,the negative impact of po-litical connections,such as distorted resource allocation,should be weakened.The role of political connec-tions in optimizing the system should be brought into play to provide a good business environment for enterpri-ses,thus better promoting the"going global"of enterprises.
political connectionoutward foreign direct investmentinformal institutionsuncertaintycontract system
NETL
NSTL
万方数据
