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Is Entrepreneur–Politician Alliance Sustainable During Transition? The Case of Management Buyouts in China

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  • Sun, Pei
  • Wright, Mike
  • Mellahi, Kamel

Abstract

This article explores the dynamic interactions between entrepreneurs and politicians in transitional China through the lens of management buyouts. Specifically, we identify two contrasting outcomes of entrepreneur–politician alliances: privatization buyouts by entrepreneurs implying sustainable original alliances and failed management buyouts implying the collapse of the original alliances. Drawing on the rent appropriation literature, we treat Chinese management buyouts as bargaining, clarification, and redistribution of organizational rent between entrepreneurs and the government agencies represented by local politicians. We further develop a model of entrepreneur–politician bargaining that identifies the determinants of varying rent bargaining and management buyout outcomes.

Suggested Citation

  • Sun, Pei & Wright, Mike & Mellahi, Kamel, 2010. "Is Entrepreneur–Politician Alliance Sustainable During Transition? The Case of Management Buyouts in China," Management and Organization Review, Cambridge University Press, vol. 6(1), pages 101-121, March.
    • Handle: RePEc:cup:maorev:v:6:y:2010:i:01:p:101-121_00
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    Citations

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    Cited by:

    1. Da Teng & Douglas B. Fuller & Chengchun Li, 2018. "Institutional change and corporate governance diversity in China’s SOEs," Asia Pacific Business Review, Taylor & Francis Journals, vol. 24(3), pages 273-293, May.
    2. Yao Li & Mike Wright & Louise Scholes, 2010. "Chinese Management Buyouts and Board Transformation," Journal of Business Ethics, Springer, vol. 95(2), pages 361-380, September.
    3. Ke Zhang & Jenny Jing Wang & Yanqi Sun & Sarowar Hossain, 2021. "Financial slack, institutional shareholding and enterprise innovation investment: evidence from China," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 61(2), pages 3235-3259, June.
    4. Zhao, Hongxin & Lu, Jiangyong, 2016. "Contingent value of political capital in bank loan acquisition: Evidence from founder-controlled private enterprises in China," Journal of Business Venturing, Elsevier, vol. 31(2), pages 153-174.
    5. Heidenreich, Stefan & Mohr, Alexander & Puck, Jonas, 2015. "Political strategies, entrepreneurial overconfidence and foreign direct investment in developing countries," Journal of World Business, Elsevier, vol. 50(4), pages 793-803.
    6. Duran-Fernandez, Roberto, 2023. "Unlocking the Potential of MBOs," EconStor Preprints 280774, ZBW - Leibniz Information Centre for Economics.
    7. Jonathan P. Doh & Thomas Lawton & Tazeeb Rajwani, 2012. "Advancing Nonmarket Strategy Research : Institutional Perspectives in a Changing World," Post-Print hal-02312974, HAL.
    8. Li, Min & He, Xinming & Sousa, Carlos M.P., 2017. "A review of the empirical research on export channel selection between 1979 and 2015," International Business Review, Elsevier, vol. 26(2), pages 303-323.
    9. Guo, Hai & Xu, Erming & Jacobs, Mark, 2014. "Managerial political ties and firm performance during institutional transitions: An analysis of mediating mechanisms," Journal of Business Research, Elsevier, vol. 67(2), pages 116-127.
    10. Zhigang Fan & Xuanshun Zhai, 2023. "The Performance Improvement Mechanism of Cross-Border E-Commerce Grassroots Entrepreneurship Empowered by the Internet Platform," Sustainability, MDPI, vol. 15(2), pages 1-14, January.
    11. Wu, Jie & Wood, Geoffrey & Khan, Zaheer, 2021. "Top management team’s formal network and international expansion of Chinese firms: The moderating role of state ownership and political ties," International Business Review, Elsevier, vol. 30(3).
    12. Chang, Ting Fa Margherita & Droli, Maurizio & Iseppi, Luca, 2015. "Extra-Core Production and Capabilities: Where is the Food Industry Going?," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 18(1), pages 1-21, February.
    13. Aurélie Sannajust & Alexander Groh, 2023. "Pioneering management buy-out and entrepreneurial finance research: Mike Wright’s research legacy," Small Business Economics, Springer, vol. 60(1), pages 1-35, January.

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