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Author(s): |
Changhong Ni, Economics and Management School, Jiangxi University of Science and Technology, Ganzhou, China, 341000
Jiehui Zhang, Economics and Management School, Jiangxi University of Science and Technology, Ganzhou, China, 341000 |
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Abstract: |
This research divides firm performance into two dimensions, that is, short term financial performance and long term growth performance. It examines the relationships between manager’s business ties and political ties, and firm performance. Results show that, managerial ties can enhance financial performance, as is consistent with previous research findings. But, as to long term growth performance, business ties can promote long-term growth performance, political ties inhibit the long-term growth of enterprises. The long-term growth is the power of short-term corporate financial performance. On the other hand, in China's economic transition process, the empirical results show that the lack of market institutions and inefficient implementation lead managers to seek the informal institutions of asylum. Moreover, with the perfect market institutions,the business ties and long term performance relationship will increase, while the political ties and short term financial performance relationship will reduce.
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