A springboard into politics: Do Chinese entrepreneurs benefit from joining the government-controlled business associations?
研究中国工商联(ACFIC)对民营企业家的影响,发现加入该协会能显著提高获得人大代表或政协委员身份的机会,但无法获取政府控制的稀缺资源,反而面临更重的税负和更多非正式支付。
Business associations in authoritarian regimes behave systematically different from their counterparts in democratic regimes. Using a unique dataset of Chinese private firms, this paper examines the impacts of joining the most prominent business association in China, the All-China Federation of Industry and Commerce (ACFIC) which was initiated and strongly controlled by the government. We find that ACFIC members have much higher chances to obtain formal political identities, that is, the deputy of People's Congress (PC) or the People's Political Consultative Conference (PPCC). However, ACFIC membership itself cannot help entrepreneurs acquire scarce resources that are controlled by the government. Rather, ACFIC members bear heavier tax burdens and make more informal payments to government officials. These findings suggest that the ACFIC act as a springboard into politics, rather than an effective collective action committee that can bring common benefits to its members or protect members from government predation.