IDEAS home Printed from https://ideas.repec.org/a/cup/maorev/v4y2008i02p225-256_00.html
   My bibliography  Save this article

Employment and Market Innovation in Chinese Business Group Affiliated Firms: The Role of Group Control Systems

Author

Listed:
  • White, Robert E.
  • Hoskisson, Robert E.
  • Yiu, Daphne W.
  • Bruton, Garry D.

Abstract

Prior research has suggested a number of potential benefits to firm membership in business groups. These benefits include availability of capital and other resources not readily accessible in an open market, the facilitation of entrepreneurship, plus information and risk sharing advantages. We suggest that another important benefit is the assistance of group control systems in helping the firm to manage conflicting pressures in the institutional environment and facilitate coevolution of these conflicting pressures. To empirically demonstrate the relevance of this viewpoint, we examine the case of China where business groups facilitate institutional transition, actively balancing market pressures to increase levels of innovativeness in firms with institutional pressures emanating from the government to maintain high employment levels. Using data from a broad sample of more than 1,000 Chinese affiliate firms in more than 200 business groups, we find that government policy, ownership and managerial mindset influence the political goal of maintaining high employment levels, while interdependence among group affiliate firms is related to lower employment levels. However, while government ownership and the government managerial mindset were negatively related to market innovation activities, group financial and cultural control systems positively affected the tendency of affiliate firms to focus on market innovation.

Suggested Citation

  • White, Robert E. & Hoskisson, Robert E. & Yiu, Daphne W. & Bruton, Garry D., 2008. "Employment and Market Innovation in Chinese Business Group Affiliated Firms: The Role of Group Control Systems," Management and Organization Review, Cambridge University Press, vol. 4(2), pages 225-256, July.
    • Handle: RePEc:cup:maorev:v:4:y:2008:i:02:p:225-256_00
    as

    Download full text from publisher

    File URL: https://www.cambridge.org/core/product/identifier/S1740877600003806/type/journal_article
    File Function: link to article abstract page
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Wu, Lichao & Wei, Yingqi & Wang, Chengang, 2021. "Disentangling the effects of business groups in the innovation-export relationship," Research Policy, Elsevier, vol. 50(1).
    2. Kim, Youngok & Lui, Steven S., 2015. "The impacts of external network and business group on innovation: Do the types of innovation matter?," Journal of Business Research, Elsevier, vol. 68(9), pages 1964-1973.
    3. Michaela Kotkova Striteska & Viktor Prokop, 2020. "Dynamic Innovation Strategy Model in Practice of Innovation Leaders and Followers in CEE Countries—A Prerequisite for Building Innovative Ecosystems," Sustainability, MDPI, vol. 12(9), pages 1-20, May.
    4. Yu Wang & Jie Ma & Tienan Wang, 2023. "Do all female directors have the same impact on corporate social responsibility? The role of their political connection," Asia Pacific Journal of Management, Springer, vol. 40(3), pages 1047-1074, September.
    5. Xing, Fei & Hai, Mengdie & Cai, Jiayao, 2023. "Network centrality and technology acquisitions: Evidence from China's listed business groups," Economic Modelling, Elsevier, vol. 120(C).
    6. Cheng, Liubing & Chen, Yanyan & Zhang, Yan, 2022. "Business groups and corporate bond costs: Evidence from China," Pacific-Basin Finance Journal, Elsevier, vol. 75(C).
    7. Douglas A. Schuler & Wei Shi & Robert E. Hoskisson & Tao Chen, 2017. "Windfalls of emperors' sojourns: Stock market reactions to Chinese firms hosting high-ranking government officials," Strategic Management Journal, Wiley Blackwell, vol. 38(8), pages 1668-1687, August.
    8. Nan Jia & Jing Shi & Yongxiang Wang, 2013. "Coinsurance Within Business Groups: Evidence from Related Party Transactions in an Emerging Market," Management Science, INFORMS, vol. 59(10), pages 2295-2313, October.
    9. Popli, Manish & Ladkani, Radha M. & Gaur, Ajai S., 2017. "Business group affiliation and post-acquisition performance: An extended resource-based view," Journal of Business Research, Elsevier, vol. 81(C), pages 21-30.
    10. Aggarwal, Raj & Jindal, Varun & Seth, Rama, 2019. "Board diversity and firm performance: The role of business group affiliation," International Business Review, Elsevier, vol. 28(6), pages 1-1.
    11. Wu, Lichao & Wei, Yingqi & Wang, Chengang & McDonald, Frank & Han, Xia, 2022. "The importance of institutional and financial resources for export performance associated with technological innovation," Technological Forecasting and Social Change, Elsevier, vol. 185(C).
    12. Lou, Zhukun & Zhu, Mingyang, 2021. "Decision rights allocation and innovation: Evidence from China's listed business groups," Finance Research Letters, Elsevier, vol. 39(C).

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cup:maorev:v:4:y:2008:i:02:p:225-256_00. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Kirk Stebbing (email available below). General contact details of provider: https://www.cambridge.org/mor .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.