Political Connection, Ownership and Firms’ Contract Environment
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| Title | Political Connection, Ownership and Firms’ Contract Environment
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| Author | Wang Yongjin |
| Organization | School of Economics, Xiamen University |
| Email | wyjin17@163.com |
| Key Words | Political Connection; Contract Enforcement Environment; Ownership |
| Abstract | Based on 2400 Chinese firms’ data from World Bank’s 2003 survey, this paper investigates the difference of contract enforcement environment between private and non-private firms. The results show that, the contract enforcement environment of private firms is significantly lower than that of the non-private enterprises and this result still hold after controlling for other firm level characters. In addition, by using endogenous switching model and propensity score matching method, we then empirically investigate the effect of political connection on firms’ contract enforcement environment, from which we find that: (1)political connections with “competent officials” and the general manager’s party relation will significantly improve firms’ contract enforcement environment, especially for that private firms. (2) Government official in the board or appointed general manager by the government have negative effect on firms’ contract enforcement environment. |
| Serial Number | WP75 |
| Time | 2011-07-20 |
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