Red Capitalists: Political Connections and the Growth and Survival of Start-Up Companies in China

30 Pages Posted: 28 Nov 2007

See all articles by Sourafel Girma

Sourafel Girma

Nottingham University Business School

Jun Du

Aston University, Aston Business School, Economics and Strategy

Abstract

This paper analyses the role of political connections in the post-entry performance of private start-up companies in China. It documents robust evidence that political affiliation enhances firms' survival and growth prospects, even if politically neutral start-ups enjoy faster productivity improvements. In addition, the benefits of political connections are largely confined to firms associated with local or top level governments, and they are more pronounced in capital-intensive industries.

Keywords: China, political connections, growth, survival

JEL Classification: P16, D2

Suggested Citation

Girma, Sourafel and Du, Jun, Red Capitalists: Political Connections and the Growth and Survival of Start-Up Companies in China. Available at SSRN: https://ssrn.com/abstract=1032948 or http://dx.doi.org/10.2139/ssrn.1032948

Sourafel Girma (Contact Author)

Nottingham University Business School ( email )

Jubilee Campus
Nottingham, NG8 1BB
United Kingdom
+44 0 115 8466656 (Phone)

HOME PAGE: http://www.nottingham.ac.uk/~lizsmg/

Jun Du

Aston University, Aston Business School, Economics and Strategy ( email )

Aston Triangle
Birmingham, B4 7ET
United Kingdom
004401212043340 (Phone)

HOME PAGE: http://www.abs.aston.ac.uk/newweb/staff/detail.asp/sfldStaffID=A0000717

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