IDEAS home Printed from https://ideas.repec.org/a/eee/techno/v69y2018icp40-53.html
   My bibliography  Save this article

Exploring the influence of political connections and managerial overconfidence on R&D intensity in China's large-scale private sector firms

Author

Listed:
  • Wang, Delu
  • Sutherland, Dylan
  • Ning, Lutao
  • Wang, Yuandi
  • Pan, Xin

Abstract

Political ties and managerial cognitive biases, specifically overconfidence, have been identified as affecting firm-level R&D processes and outcomes. Here we further conceptually and empirically explore how these two factors may influence R&D intensity in an emerging market context. Our empirical results, based on panel data from 1293 Chinese publicly listed firms (between 2010 and 2014) show, contrary to some previous research, that stronger formal political ties somewhat reduce firm-level R&D intensity. Greater overconfidence in managers, by contrast, increases R&D intensity. Interestingly, moreover, overconfidence positively moderates the relationship between political ties and R&D intensity to the extent that the weak negative relationship becomes positive in the presence of overconfidence. Our results highlight the role of managerial mindset as an important determinant of R&D intensity in the emerging market context.

Suggested Citation

  • Wang, Delu & Sutherland, Dylan & Ning, Lutao & Wang, Yuandi & Pan, Xin, 2018. "Exploring the influence of political connections and managerial overconfidence on R&D intensity in China's large-scale private sector firms," Technovation, Elsevier, vol. 69(C), pages 40-53.
    • Handle: RePEc:eee:techno:v:69:y:2018:i:c:p:40-53
    DOI: 10.1016/j.technovation.2017.10.007
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0166497217307812
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.technovation.2017.10.007?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

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


    Cited by:

    1. Nishwa Iqbal Dar & Syed Zulfiqar Ali Shah & Zeeshan Ahmed, 2021. "Behavioral Cost of Managerial Decisions Under Risk Perception and Culture: A Comparative Study Between the United States and Pakistan," SAGE Open, , vol. 11(3), pages 21582440211, July.
    2. Wang, Chengqi & Kafouros, Mario & Yi, Jingtao & Hong, Junjie & Ganotakis, Panagiotis, 2020. "The role of government affiliation in explaining firm innovativeness and profitability in emerging countries: Evidence from China," Journal of World Business, Elsevier, vol. 55(3).
    3. Wang, Zhongcheng & Li, Xinyue & Xue, Xinhong & Liu, Yahuan, 2022. "More government subsidies, more green innovation? The evidence from Chinese new energy vehicle enterprises," Renewable Energy, Elsevier, vol. 197(C), pages 11-21.
    4. Zhu, Changchun & Li, Na & Ma, Jing, 2024. "Impact of CEO overconfidence on enterprise digital transformation: Moderating effect based on digital finance," Finance Research Letters, Elsevier, vol. 59(C).
    5. Wang, Zhiqiang & Chen, Xiaoli & Zhang, Shanshan & Yin, Ying & Zhao, Xiande, 2022. "The impact of political ties on firm innovativeness: Testing a mediation and moderation model," Journal of Business Research, Elsevier, vol. 144(C), pages 523-534.
    6. Jancenelle, Vivien E., 2021. "Tangible−Intangible resource composition and firm success," Technovation, Elsevier, vol. 108(C).
    7. Jennifer Kunz & Lara Sonnenholzner, 2023. "Managerial overconfidence: promoter of or obstacle to organizational resilience?," Review of Managerial Science, Springer, vol. 17(1), pages 67-128, January.
    8. Lee, Mina & Mutlu, Canan & Lee, Seung-Hyun, 2023. "Bribery and Firm Growth: Sensemaking in CEE and Post-Soviet Countries," Journal of International Management, Elsevier, vol. 29(1).
    9. Liu, Yang & Dong, Jiuyu & Mei, Liang & Shen, Rui, 2023. "Digital innovation and performance of manufacturing firms: An affordance perspective," Technovation, Elsevier, vol. 119(C).
    10. Li, Yang & Tang, Yujie, 2021. "A dynamic capabilities perspective on pro-market reforms and university technology transfer in a transition economy," Technovation, Elsevier, vol. 103(C).
    11. Imen Tebourbi & Irene Wei Kiong Ting & Hanh Thi My Le & Qian Long Kweh, 2020. "R&D investment and future firm performance: The role of managerial overconfidence and government ownership," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 41(7), pages 1269-1281, October.
    12. Krammer, Sorin M.S. & Jiménez, Alfredo, 2020. "Do political connections matter for firm innovation? Evidence from emerging markets in Central Asia and Eastern Europe," Technological Forecasting and Social Change, Elsevier, vol. 151(C).
    13. Zhang, Jing A. & O'Kane, Conor & Chen, Guoquan, 2020. "Business ties, political ties, and innovation performance in Chinese industrial firms: The role of entrepreneurial orientation and environmental dynamism," Journal of Business Research, Elsevier, vol. 121(C), pages 254-267.
    14. Wang, Chengqi & Piperopoulos, Panagiotis & Chen, Shihua & Ming, Alan Au Kai & Herbert, Kendall, 2022. "Outward FDI and Innovation Performance of Chinese Firms: Why Can Home-Grown Political Ties Be A Liability?," Journal of World Business, Elsevier, vol. 57(3).

    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:eee:techno:v:69:y:2018:i:c:p:40-53. 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: Catherine Liu (email available below). General contact details of provider: http://www.sciencedirect.com/science/journal/01664972 .

    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.