This paper investigates the relationship between political connection and credit risk of real estate enterprises, a topic not previously formally studied. Using panel data of 123 Chinese real estate listed companies from 2008-2021, the study finds a significant positive correlation between political connection and credit risk for private firms, attributed to excessive debt facilitated by these connections. The rise of internet finance since 2013 is shown to enhance this effect. The findings offer micro-level evidence on credit risk factors in China's recent real estate market crisis.
