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Political Ties of Listed Chinese Companies, Performance Effects, and Moderating Institutional Factors

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  • Arnoldi, Jakob
  • Villadsen, Anders R.

Abstract

Although development in China is quite heterogeneous across regions, little research has explored how the value of Chinese firms’ political ties is contingent on the institutional and economic development of firms’ regional environment. This article explores some of the factors that moderate the benefit of political ties, differentiating between ties to central and local government. The study investigates how benefits of ties to central and local government are moderated by regional market and economic development, respectively. The study is based on a quantitative analysis of 858 listed Chinese firms. The results suggest that firms enjoy a positive effect of political ties but mainly ties to central government. The analysis, furthermore, finds these ties to be less valuable in economically well-developed regions. Market development, on the other hand, does not moderate the effects of local or central government ties.

Suggested Citation

  • Arnoldi, Jakob & Villadsen, Anders R., 2015. "Political Ties of Listed Chinese Companies, Performance Effects, and Moderating Institutional Factors," Management and Organization Review, Cambridge University Press, vol. 11(2), pages 217-236, June.
    • Handle: RePEc:cup:maorev:v:11:y:2015:i:02:p:217-236_00
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    Cited by:

    1. Hiroyuki Okamuro & Junichi Nishimura, 2021. "Effects of multilevel policy mix of public R&D subsidies: Empirical evidence from Japanese local SMEs [The Impact of R&D Subsidies on R&D Employment Composition]," Science and Public Policy, Oxford University Press, vol. 48(6), pages 829-840.
    2. Liu, Wei & De Sisto, Marco & Li, Wen Helena, 2021. "How does the turnover of local officials make firms more charitable? A comprehensive analysis of corporate philanthropy in China," Emerging Markets Review, Elsevier, vol. 46(C).
    3. Hongjuan Zhang & Rong Han & Liang Wang & Runhui Lin, 0. "Social capital in China: a systematic literature review," Asian Business & Management, Palgrave Macmillan, vol. 0, pages 1-46.
    4. Dai, Weiqi & Si, Steven, 2018. "Government policies and firms' entrepreneurial orientation: Strategic choice and institutional perspectives," Journal of Business Research, Elsevier, vol. 93(C), pages 23-36.
    5. Ruey-Jer ‘Bryan’ Jean & Rudolf R. Sinkovics & Stefan Zagelmeyer, 2018. "Antecedents and Innovation Performance Implications of MNC Political Ties in the Chinese Automotive Supply Chain," Management International Review, Springer, vol. 58(6), pages 995-1026, December.
    6. Gamso, Jonas & Nelson, Roy C., 2019. "Does partnering with the World Bank shield investors from political risks in less developed countries?," Journal of World Business, Elsevier, vol. 54(5), pages 1-1.
    7. Weiqi Dai & Mingqing Liao, 2019. "Entrepreneurial attention to deregulations and reinvestments by private firms: Evidence from China," Asia Pacific Journal of Management, Springer, vol. 36(4), pages 1221-1250, December.
    8. Zhiyong Niu & Xiaoyan Zhou & Hongzhou Pei, 2020. "Social determinants of sustainability: The imprinting effect of social class background on corporate environmental responsibility," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 27(6), pages 2849-2866, November.
    9. Zheng, Weiting & Ang, Siah Hwee & Singh, Kulwant, 2022. "The interface of market and nonmarket strategies: Political ties and strategic competitive actions," Journal of World Business, Elsevier, vol. 57(4).
    10. Jianghua Zhou & Rui Wu & Jizhen Li, 2019. "More ties the merrier? Different social ties and firm innovation performance," Asia Pacific Journal of Management, Springer, vol. 36(2), pages 445-471, June.
    11. Dujuan Huang & Hongbo Duan & Gupeng Zhang, 2020. "Analysis on the Enterprises’ Innovation Quality Based on the Patent Value: A Comparison between Public and Private Enterprises in China," Sustainability, MDPI, vol. 12(8), pages 1-15, April.
    12. En Xie & Yuanyuan Huang & Hao Shen & Yu Li, 2017. "Performance implications of ties to large-scale state-owned enterprises and banks in an emerging economy," Asia Pacific Journal of Management, Springer, vol. 34(1), pages 97-121, March.
    13. Wu Wei & Xuan Zhao & Mei Li & Malcolm Warner, 2016. "Integrating nonmarket and market resources, strategy and performance in Chinese enterprises: a review of the field and a resource-based empirical study," Asia Pacific Business Review, Taylor & Francis Journals, vol. 22(2), pages 220-237, April.
    14. Hongjuan Zhang & Rong Han & Liang Wang & Runhui Lin, 2021. "Social capital in China: a systematic literature review," Asian Business & Management, Palgrave Macmillan, vol. 20(1), pages 32-77, February.
    15. Gupeng Zhang & Qianlong Zhang & Dujuan Huang, 2020. "Impact of Political Connection Strength on the Internationalization Outcome of Chinese Firms: Perspectives from Market Exploration and Technology Acquisition," Sustainability, MDPI, vol. 12(4), pages 1-17, February.
    16. Xie, Xuemei & Wu, Yonghui & Martínez, José Manuel Guaita, 2023. "More is not always better: Reconciling the dilemma of R&D collaboration in high-tech industries in transition economies," Technological Forecasting and Social Change, Elsevier, vol. 190(C).
    17. Jakob Arnoldi & Yulia Muratova, 2019. "Unrelated acquisitions in China: The role of political ownership and political connections," Asia Pacific Journal of Management, Springer, vol. 36(1), pages 113-134, March.
    18. Yi Liu & Wenqian Li & Yuan Li, 2020. "Ambidexterity between low cost strategy and CSR strategy: contingencies of competition and regulation," Asia Pacific Journal of Management, Springer, vol. 37(3), pages 633-660, September.

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