IDEAS home Printed from https://ideas.repec.org/a/kap/asiapa/v41y2024i3d10.1007_s10490-023-09881-w.html
   My bibliography  Save this article

When political ties matter for firm performance? The role of CEO’s political utilization orientation and prosocial orientation

Author

Listed:
  • Yin Bai

    (Tianjin University)

  • Yingzhao Xiao

    (Tianjin University)

  • Jingzhou Pan

    (Tianjin University)

  • Youchao Tan

    (Jinan University)

  • Cheng Zeng

    (Hong Kong Polytechnic University)

Abstract

This study investigates how and under which conditions political ties affect firm performance in a transition economy. Using the network-based view of social capital, we first distinguish between the two stages of accessing and mobilizing social capital in political ties, and then focus on network exploitation of political ties, proposing that government support acts as a mechanism that converts political ties into firm performance. We further examine the role of two personal traits of CEOs—political utilization orientation and prosocial orientation—in moderating this relationship. Using multi-source data from 626 small and medium-sized enterprises in China’s transition economy, we find that the effect of political ties on firm performance largely depends on the extent to which political ties can be utilized, and that the CEO’s political utilization orientation and prosocial orientation positively moderate this relationship. The implications of our findings for theory and practice are discussed.

Suggested Citation

  • Yin Bai & Yingzhao Xiao & Jingzhou Pan & Youchao Tan & Cheng Zeng, 2024. "When political ties matter for firm performance? The role of CEO’s political utilization orientation and prosocial orientation," Asia Pacific Journal of Management, Springer, vol. 41(3), pages 1395-1420, September.
  • Handle: RePEc:kap:asiapa:v:41:y:2024:i:3:d:10.1007_s10490-023-09881-w
    DOI: 10.1007/s10490-023-09881-w
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s10490-023-09881-w
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.

    File URL: https://libkey.io/10.1007/s10490-023-09881-w?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.

    References listed on IDEAS

    as
    1. Ding, Rong & Li, Jialong & Wu, Zhenyu, 2018. "Government affiliation, real earnings management, and firm performance: The case of privately held firms," Journal of Business Research, Elsevier, vol. 83(C), pages 138-150.
    2. Ilya Okhmatovskiy, 2010. "Performance Implications of Ties to the Government and SOEs: A Political Embeddedness Perspective," Journal of Management Studies, Wiley Blackwell, vol. 47(6), pages 1020-1047, September.
    3. Sunny Li Sun & Mike W. Peng & Weiqiang Tan, 2017. "Institutional relatedness behind product diversification and international diversification," Asia Pacific Journal of Management, Springer, vol. 34(2), pages 339-366, June.
    4. Jing Zhang & Justin Tan & Poh Wong, 2015. "When does investment in political ties improve firm performance? The contingent effect of innovation activities," Asia Pacific Journal of Management, Springer, vol. 32(2), pages 363-387, June.
    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. Sonja Opper, 2023. "Social network and institution-based strategy research," Asia Pacific Journal of Management, Springer, vol. 40(1), pages 329-351, March.
    7. Haiyang Li & Yan Zhang, 2007. "The role of managers' political networking and functional experience in new venture performance: Evidence from China's transition economy," Strategic Management Journal, Wiley Blackwell, vol. 28(8), pages 791-804, August.
    8. Julie Juan Li & Laura Poppo & Kevin Zheng Zhou, 2008. "Do managerial ties in China always produce value? Competition, uncertainty, and domestic vs. foreign firms," Strategic Management Journal, Wiley Blackwell, vol. 29(4), pages 383-400, April.
    9. Jakob Arnoldi & Yulia Muratova, 2019. "Unrelated acquisitions in China: The role of political ownership and political connections," Asia Pacific Journal of Management, Springer, vol. 36(1), pages 113-134, March.
    10. Tao Wang & Ting Zhang & Zhigang Shou, 2021. "The double-edged sword effect of political ties on performance in emerging markets: The mediation of innovation capability and legitimacy," Asia Pacific Journal of Management, Springer, vol. 38(3), pages 1003-1030, September.
    11. Lin Zhang & Xiaojun Zhang & Youmin Xi, 2017. "The sociality of resources: Understanding organizational competitive advantage from a social perspective," Asia Pacific Journal of Management, Springer, vol. 34(3), pages 619-648, September.
    12. Christopher Marquis & Cuili Qian, 2014. "Corporate Social Responsibility Reporting in China: Symbol or Substance?," Organization Science, INFORMS, vol. 25(1), pages 127-148, February.
    13. Weiting Zheng & Kulwant Singh & Will Mitchell, 2015. "Buffering and enabling: The impact of interlocking political ties on firm survival and sales growth," Strategic Management Journal, Wiley Blackwell, vol. 36(11), pages 1615-1636, November.
    14. 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.
    15. Yadong Luo, 2003. "Industrial dynamics and managerial networking in an emerging market: the case of China," Strategic Management Journal, Wiley Blackwell, vol. 24(13), pages 1315-1327, December.
    16. Jianfeng Wu & Sali Li & Zijie Li, 2013. "The contingent value of CEO political connections: A study on IPO performance in China," Asia Pacific Journal of Management, Springer, vol. 30(4), pages 1087-1114, December.
    17. Xu, Nianhang & Yuan, Qingbo & Jiang, Xuanyu & Chan, Kam C., 2015. "Founder's political connections, second generation involvement, and family firm performance: Evidence from China," Journal of Corporate Finance, Elsevier, vol. 33(C), pages 243-259.
    18. Wenfeng Wu & Sofia A. Johan & Oliver M. Rui, 2016. "Institutional Investors, Political Connections, and the Incidence of Regulatory Enforcement Against Corporate Fraud," Journal of Business Ethics, Springer, vol. 134(4), pages 709-726, April.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Hongjuan Zhang & Rong Han & Liang Wang & Runhui Lin, 2021. "Social capital in China: a systematic literature review," Asian Business & Management, Palgrave Macmillan, vol. 20(1), pages 32-77, February.
    2. Hongjuan Zhang & Rong Han & Liang Wang & Runhui Lin, 0. "Social capital in China: a systematic literature review," Asian Business & Management, Palgrave Macmillan, vol. 0, pages 1-46.
    3. Lee, Tingko, 2019. "Management ties and firm performance: Influence of family governance," Journal of Family Business Strategy, Elsevier, vol. 10(2), pages 105-118.
    4. Jianghua Zhou & Rui Wu & Jizhen Li, 2019. "More ties the merrier? Different social ties and firm innovation performance," Asia Pacific Journal of Management, Springer, vol. 36(2), pages 445-471, June.
    5. En Xie & Yuanyuan Huang & Hao Shen & Yu Li, 2017. "Performance implications of ties to large-scale state-owned enterprises and banks in an emerging economy," Asia Pacific Journal of Management, Springer, vol. 34(1), pages 97-121, March.
    6. Weiqi Dai & Mingqing Liao, 2019. "Entrepreneurial attention to deregulations and reinvestments by private firms: Evidence from China," Asia Pacific Journal of Management, Springer, vol. 36(4), pages 1221-1250, December.
    7. Weiting Zheng & Na Ni & Donal Crilly, 2019. "Non‐profit organizations as a nexus between government and business: Evidence from Chinese charities," Strategic Management Journal, Wiley Blackwell, vol. 40(4), pages 658-684, April.
    8. Kui Wang & Qiyuan Zhang & Danqing Wang & Defeng Yang, 2024. "The impact of political ties on firms’ innovation capability: Evidence from China," Asia Pacific Journal of Management, Springer, vol. 41(3), pages 1481-1513, September.
    9. Rui Wang & Yi-Na Li & Jiuchang Wei, 2022. "Growing in the changing global landscape: the intangible resources and performance of high-tech corporates," Asia Pacific Journal of Management, Springer, vol. 39(3), pages 999-1022, September.
    10. Yusi Jiang & Tianyu Gong & Wan Cheng & Yapu Zhao, 2023. "Repression or indulgence? Distinctive government influence on firm financial and environmental misconduct in China," Asian Business & Management, Palgrave Macmillan, vol. 22(1), pages 379-402, February.
    11. Lebedev, Sergey & Sun, Sunny Li & Markóczy, Lívia & Peng, Mike W., 2021. "Board political ties and firm internationalization," Journal of International Management, Elsevier, vol. 27(3).
    12. Chun Yang & Bart Bossink & Peter Peverelli, 2018. "The Value of Business–Government Ties for Manufacturing Firms’ Product Innovation during Institutional Transition in China," Sustainability, MDPI, vol. 11(1), pages 1-27, December.
    13. 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.
    14. Meng, Shuang & Gomez-Mejia, Luis R. & Yi, Jingtao, 2024. "Political embeddedness, socioemotional wealth, and R&D investment in family firms: Evidence from China as a transition economy," Journal of Family Business Strategy, Elsevier, vol. 15(3).
    15. Zheng, Weiting & Ang, Siah Hwee & Singh, Kulwant, 2022. "The interface of market and nonmarket strategies: Political ties and strategic competitive actions," Journal of World Business, Elsevier, vol. 57(4).
    16. Qingqing Tang & Longwei Wang & Hao Shen, 2021. "How do SOEs and FIEs affect POEs’ performance in emerging economies? Moderating effects of managerial ties," Asia Pacific Journal of Management, Springer, vol. 38(2), pages 767-788, June.
    17. Wang, Yanyu & You, Qinghua & Qiao, Yuanbo, 2022. "Political genes drive innovation: Political endorsements and low-quality innovation," Structural Change and Economic Dynamics, Elsevier, vol. 60(C), pages 407-417.
    18. Jooyoung Kwak & Shih-Yi Chang & Meihui Jin, 2023. "The effects of political ties on innovation performance in China: Differences between central and local governments," Asian Business & Management, Palgrave Macmillan, vol. 22(1), pages 300-329, February.
    19. Lijun Xu & Yun Zhu & Chuanyang Ruan & Weijin Shi, 2021. "Excessive Ties in Entrepreneurship Can Hurt: How Excess Entrepreneurial Ties Bring Negative Effects to the Firm," SAGE Open, , vol. 11(2), pages 21582440211, June.
    20. 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.

    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:kap:asiapa:v:41:y:2024:i:3:d:10.1007_s10490-023-09881-w. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    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.