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Red Capitalists: Political Connections and the Growth and Survival of Start-up Companies in China

Author

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  • Jun Du
  • Sourafel Girma

Abstract

This paper analyses the role of political connections in the post-entry performance of private start-up companies in China. It documents robust evidence that political affiliation enhances firms’ survival and growth prospects, even if politically neutral start-ups enjoy faster productivity improvements. In addition, the benefits of political connections are largely confined to firms associated with local or top level governments, and they are more pronounced in capital-intensive industries.

Suggested Citation

  • Jun Du & Sourafel Girma, 2007. "Red Capitalists: Political Connections and the Growth and Survival of Start-up Companies in China," Discussion Papers 07/40, University of Nottingham, GEP.
  • Handle: RePEc:not:notgep:07/40
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    File URL: https://www.nottingham.ac.uk/gep/documents/papers/2007/07-40.pdf
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    Cited by:

    1. Maggie Xiaoyang Chen, 2013. "The Matching Of Heterogeneous Firms And Politicians," Economic Inquiry, Western Economic Association International, vol. 51(2), pages 1502-1522, April.
    2. Jun Du & Sourafel Girma, 2009. "Source of Finance, Growth and Firm Size - Evidence from China," WIDER Working Paper Series RP2009-03, World Institute for Development Economic Research (UNU-WIDER).

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