CHAPTER 3 RESEARCH METHODOLOGY
3.2 Issues to be Noted During the Interview: Political and Business Relations
In this in-depth interview, we need to pay attention to the relationship between government and business. Researchers define the relationship between government and business as the relationship between local governments (including state-owned enterprises) and enterprises. It should be noted that if we only say "enterprise", it refers to private enterprises, excluding state-owned enterprises, because state-owned enterprises are essentially the expansion of the national government bureaucracy in the economic field, and state-owned enterprises are essentially "political". The
"entrepreneurs" in this study include both state-owned enterprises and private entrepreneurs.
Under special institutional environments of China, the relationship between government and business has become the focus of many scholars' attention and research, but whether it is qualitative or quantitative, it is still in its infancy (Tian et al., 2016). Since the relationship between government and business is usually private and morally sensitive, some entrepreneurs may speak with “reservations” during the
interview process, which requires researchers to “see and observe” and make accurate judgments.
Western countries have relatively formal and legal political-business relations.
When dealing with governments, companies usually use full-time representatives to communicate with the government, and lobby through trade associations or special alliances, which affect laws and regulations. Therefore, Western countries have highly impersonal political and business relations (Shiquan Wang & Wang, 2011) while China is a humanistic society with “humanistic culture”, which has strong personal characteristics, and is pervasive in social networks, especially in political and business relations. At the same time, China is in a period of economic transformation, accompanied by the lack of corresponding mature and perfect systems and property rights conditions. The Chinese government (including state-owned enterprises) has absolute monopoly control over key social resources. Therefore, for most Chinese private enterprises, if they want to adapt to society and continue to grow, it is difficult to get rid of the "Chinese-style" environment of government-business relations under national conditions. In order to survive, private enterprises will inevitably face two kinds of decision-making in the relationship between government and business: passive response and preemptive measures. The former hopes that the company will avoid
“legal harm” from the government, while the latter actively establish close personal relationships with government officials or key figures in order to obtain important or critical resources or special protection (Yu & Wu, 2012).
Under the special economic transition context of China, private enterprises are relatively weaker than state-owned enterprises in terms of obtaining special resources such as financing advantages and preferential tax rates. Private entrepreneurs actively participate in politics, participate in political discussions, or participating in the deliberations through elections to become deputies to the National People's Congress or CPPCC members, and escort the survival and development of enterprises. These
measures can be regarded as a political strategy for private enterprises (Wu, Wu, & Liu, 2008). Therefore, in order to maintain political connections, companies often tend to maintain and strengthen their political connections with donations that are legal and can win the trust of the government, and favor and attention of the public. For example, Z.
Zhang (2009) and others found that the earthquake donations of state-owned enterprises are lower than that of private enterprises, indicating that the nature of ownership may affect the donation behavior of enterprises. Ownership directly represents the political connection of a enterprise to a large extent. Jia and Zhang (2010) also found that listed companies with political affiliation are more inclined to make charitable donations.
Many of the management personnel were formerly government officials, and they still maintain close financial, administrative and personal relations with the government.
These entrepreneurs can still rely on their cadre background and network to navigate the commercial ocean and make huge profits (Wu et al., 2008). Therefore, the work experience of many corporate executives that have previously served in the government, or served as representatives of the National People’s Congress or CPPCC members, local government advisers or counselors, are the dimensions of their political connections (Yue et al., 2013).
If enterprises can establish a good social relationship with the government, they will find it easier to obtain a tangible or intangible policy protection from the government. Running with the support of the government, enterprises will certainly get twice the result with half the effort. It is common for companies to get charitable donations led by local charities so as to help local governments reduce the burden of public services. This "relationship" between the two sides can be said to be mutually beneficial. For example, the government intervention in credit allocation to exchange resources with private enterprises is the key to politically-linked private enterprises' charitable donations affecting debt financing (Li, Wang, & Xu, 2015). Therefore, entrepreneurs generally do not disclose the full details of this mystery in interviews.
Researchers need to think deeply and ask questions without trace, while referring to more previous literature.
In the 1990s, many scholars took a positive attitude towards China's distinctive political and business relations. They believed that in the period of economic transformation, close political-business relations have promoted the performance of enterprises and improved their competitiveness (Zhang & Zhang, 2005). Enterprises that have a close relationship with the government are more susceptible to the government persuasion and donate more actively (Lu, 2002).The political connections of corporate executives are significantly positive correlatied with the fierce market competition of the company's main products and corporate donations (Yue et al., 2013).
Some scholars have also put forward the concept of “systematic corruption”, believing that the previously open political-business alliance has quietly transformed into private government-business collusion, leading to systemic corruption (Li, 2005). In the interviews, many entrepreneurs stated that they did "passively" accept the charity requirements of the local government, organized public welfare activities with the government, and received support and awards from the government. Some people were unwilling to cooperate with the government, and joined charity organize just to expand your charity. However, when they do enough and get media attention, the government will take the initiative to come to the door, offer support and awards, or seek further cooperation between the two parties. However, enterprises charity donation under government supervision have had a good impact on the strength and sustainability of charitable donations. This is also consistent with the fact that entrepreneurs who are keen on charitable giving have different social responsibilities in this study.