Does State Ownership Bring Benefits for Private Enterprises? An Empirical Study Based on Chinese Listed Companies

The effects of political connections brought by private entrepreneurs' participation in politics are widely concerned, but it needs to be further proved that whether the state ownership in private-owned enterprises also has the effect of political connections. Based on private-controlled listed companies in China, this paper studies the effect of state ownership in private-owned enterprises as a political connection mechanism. The results show that state ownership can help private-owned enterprises to acquire more economic resources and development opportunities owing to its systematic connections with the governments, which works as a reputation guarantee for the development of private-owned enterprises. Meanwhile, these financing convenience and economic resources further improve the private-owned firms' performance. It adds to the research references in the fields of enterprises' political connections, and provides a new perspective for fully understanding the effects of political connections in the period of China's economic transformation.