Charitable Donation, Political Connection and Financing Constraint--Empirical Analysis on Chinese Private Enterprises
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| Title | Charitable Donation, Political Connection and Financing Constraint--Empirical Analysis on Chinese Private Enterprises
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| Author | Wang Yiming and Liu Yiming |
| Organization | Xiamen University |
| Email | wym@xmu.edu.cn |
| Key Words | Private Enterprise; Charitable Donation; Political Connection; Financing Constraint. |
| Abstract | The development of Chinese private enterprises restricted by the firm size. In order to obtain more financial resources, the entrepreneurs always seek for different ways to extend the financing channels. This paper employs the survey data, compiled by the private business research group every second year during 1991 to 2012, to investigate whether charitable donation and political connection can affect the financing constraint level. Meanwhile, this paper controls the individual characteristics of entrepreneurs to explore the heterogeneity effects on financing constraints. The regression results show that charitable donation and political connection can release the financing troubles of private enterprises by obtaining more loans. While the politically connected firms can obtain more financial resources than the non-politically connected ones if they donate. Based on the empirical analysis, this paper illustrates the effects of charitable donation, political connection and the individual characteristics of entrepreneurs on financing constraints, which provides right direction for the sustainable development of Chinese private enterprises. |
| Serial Number | WP1174 |
| Time | 2017-03-31 |
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