A new measure of enterprise efficiency by using a stochastic frontier approach is introduced to estimate the production efficiencies of private listed firms in China in the period of 2002~2005. This paper investigates the relationship among the type of private listed firms, political connections and market valuation. The results show that, the direct listed private firms have significantly greater political connections and higher market valuation than indirect listed private firms; political connections of direct listed firms have no influence on the market valuation, but the political connections of indirect listed firms have significantly negative effect on the market valuation.
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