The new government-business relationship and firm value

The government-business relationship is a significant factor that affects the firm value. General Secretary Xi Jinping proposed a new government-business relationship in the report of the 19th CPC National Congress. Can a new government-business relationship improve the regional business environment and exert a positive resource effect to promote firm value? This question has not been fully discussed in the existing literature. We selected the data of A-share listed companies in Shanghai and Shenzhen from 2017 to 2020 and constructed a structural equation model (SEM) to study the impact of the new government-business relationship on firm value. The results show that the new government-business relationship promotes the growth of firm value, especially in the "unsullied" government-business relationship. This study enriched the academic theories on the government-business relationship in China, while providing micro-level empirical evidence for the organic combination of efficient markets and responsive government.