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Political Connections, Financial Constraints and Long-term Growth

Author

Listed:
  • Haoxiang Tong
  • Boya Yu
  • Jing Wu
  • Guanping Zhou

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

Suggested Citation

  • Haoxiang Tong & Boya Yu & Jing Wu & Guanping Zhou, 2020. "Political Connections, Financial Constraints and Long-term Growth," Journal of Applied Finance & Banking, SCIENPRESS Ltd, vol. 10(2), pages 1-4.
    • Handle: RePEc:spt:apfiba:v:10:y:2020:i:2:f:10_2_4
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    References listed on IDEAS

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    More about this item

    Keywords

    political connections; private listed company; financial constraints; long-term growth;
    All these keywords.

    JEL classification:

    • D92 - Microeconomics - - Micro-Based Behavioral Economics - - - Intertemporal Firm Choice, Investment, Capacity, and Financing

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