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Political Strategy and Market Capabilities: Evidence from the Chinese Private Sector

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  • Jia, Nan

Abstract

In this article, I argue that in emerging markets firms' market capabilities are positively related to the political strategies that they employ to reduce the risks of expropriation by public and private entities. I focus specifically on the moderating conditions, including institutional environments that have direct constraint on governmental power, supportive policies that promote private sector growth, and developed legal systems. My empirical analysis utilizes data on privately owned Chinese enterprises. The results show that firms' market capabilities – as indicated by their asset turnover ratios and R&D intensity – are positively related to their likelihood of participating in key policymaking political organizations but this relationship is weaker in provinces that have more effective constraints on governmental power, more supportive policies for private sector growth, and more developed legal systems.

Suggested Citation

  • Jia, Nan, 2016. "Political Strategy and Market Capabilities: Evidence from the Chinese Private Sector," Management and Organization Review, Cambridge University Press, vol. 12(1), pages 75-102, March.
    • Handle: RePEc:cup:maorev:v:12:y:2016:i:01:p:75-102_00
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    Cited by:

    1. Wei, Yifan, 2022. "Reprint of: Regional governments and opportunity entrepreneurship in underdeveloped institutional environments: An entrepreneurial ecosystem perspective," Research Policy, Elsevier, vol. 51(9).
    2. Tao Bai & Stephen Chen & Xiao He, 2019. "How Home-Country Political Connections Influence the Internationalization of Service Firms," Management International Review, Springer, vol. 59(4), pages 541-560, August.
    3. Choi, Seong-jin & Jiménez, Alfredo & Lee, Jeoung Yul, 2020. "The impact of political capabilities and political markets on firms' decision to lobby," Journal of International Management, Elsevier, vol. 26(4).
    4. Donbesuur, Francis & Zahoor, Nadia & Al-Tabbaa, Omar & Adomako, Samuel & Tarba, Shlomo Y., 2023. "On the performance of platform-based international new ventures: The roles of non-market strategies and managerial competencies," Journal of International Management, Elsevier, vol. 29(2).
    5. Wei, Yifan, 2022. "Regional governments and opportunity entrepreneurship in underdeveloped institutional environments: An entrepreneurial ecosystem perspective," Research Policy, Elsevier, vol. 51(1).
    6. Garry D. Bruton & David Ahlstrom & Juanyi Chen, 2021. "China has emerged as an aspirant economy," Asia Pacific Journal of Management, Springer, vol. 38(1), pages 1-15, March.
    7. Zhou, Kevin Zheng & Wang, Kui & Xu, Dean & Xie, En, 2022. "Drinking poison to quench thirst: Does bribery foster firm performance in China?," Journal of Business Research, Elsevier, vol. 147(C), pages 505-517.
    8. Xin Li & Li Ma, 2020. "Chinese management research needs self-confidence but not over-confidence," Asia Pacific Journal of Management, Springer, vol. 37(2), pages 481-498, June.
    9. Weiping Liu & Jiatao Li, 2019. "Unbalanced Institutions in Market Transition: How Do They Matter for Firm Strategic Choices and Performance in Emerging Economies?," Management International Review, Springer, vol. 59(5), pages 675-702, October.
    10. Thomas Wrona & Corinna Sinzig, 2018. "Nonmarket strategy research: systematic literature review and future directions," Journal of Business Economics, Springer, vol. 88(2), pages 253-317, February.
    11. Fawad Rauf & Cosmina Lelia Voinea & Hammad Bin Azam Hashmi & Cosmin Fratostiteanu, 2020. "Moderating Effect of Political Embeddedness on the Relationship between Resources Base and Quality of CSR Disclosure in China," Sustainability, MDPI, vol. 12(8), pages 1-19, April.

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