An Empirical Study on the Performance of Listed Firms Affected by CEO's Political Connection

This is to test whether firms with politically connected CEOs are easier to enter into the governmentally regulated industries, easier to obtain some financial subsidies from government, easier to get bank loans or easier to enjoy some other political advantages or not. We made an empirical study with a sample of A-share listed firms with politically connected CEOs from 2005 to 2007, and then, we tested the performances of these firms with political advantages, using ROA, which is said to be a regular index for performance. In order to further elaborate the reliability of the test, we took Tobin Q and F, which was calculated by the Factor Analysis and here was used as a comprehensive index for performance of listed firms, into the Correlating Regression. Finally, we found that firms with politically connected CEOs had obvious political advantages, and then largely enhanced their firms' value.