Game analysis on the motivations for political connections in China's listed companies based on a principal-agent model

Based on a principal-agent model, the motivations of China's listed companies to have political connections are analyzed using Game Theory. The internal mechanism of the motivation is also demonstrated, that is, the performance of senior executives is directly exposed to the influence of political connections. When government resources are used for a trade, whether openly or covertly, the agent will perceive the political contact as a "high-speed channel" through which the contact will turn into a large profit; when the agent improves his performance and gains profit through political ties and the listed company gains profit and improves the company's value, the agent's work enthusiasm is reduced due to the political contact; thus the agent's working efficiency is decreased, which may erode the value of the listed company.