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Political connections and corporate diversification in emerging economies: Evidence from China

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  • Weiwen Li
  • Ai He
  • Hailin Lan
  • Daphne Yiu

Abstract

Drawing upon the resource-based view, this study examines how political connections affect corporate diversification in an emerging economy. Data from a sample of 1,280 Chinese public firms over 2002–2005 show a strong positive relationship between political connections and corporate diversification. We also find that the positive relationship between political connections and corporate diversification is moderated by the level of state ownership in firms and the level of regional institutional development. Theoretical and managerial implications are discussed. Copyright Springer Science+Business Media, LLC 2012

Suggested Citation

  • Weiwen Li & Ai He & Hailin Lan & Daphne Yiu, 2012. "Political connections and corporate diversification in emerging economies: Evidence from China," Asia Pacific Journal of Management, Springer, vol. 29(3), pages 799-818, September.
    • Handle: RePEc:kap:asiapa:v:29:y:2012:i:3:p:799-818
    DOI: 10.1007/s10490-011-9265-5
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    References listed on IDEAS

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