IDEAS home Printed from https://ideas.repec.org/a/sae/sagope/v13y2023i4p21582440231218780.html
   My bibliography  Save this article

How the Social Relations Affect Performance in Chinese High-tech New Ventures: The Role of Legitimacy Acquisition and Symbolic Strategy

Author

Listed:
  • Yunqing Liu
  • Zekun Dai
  • Yiting Wu
  • Fang Da

Abstract

Existing research on the relationship between social relations and new venture’s performance remains inconsistent. From the perspective of institutional theory, we introduce legitimacy acquisition and symbolic strategy to develop a theoretical model to explain the disparities in the Chinese transition economy. Based on the survey data of 242 small and medium-sized enterprises (SMEs) in China’s strategic emerging industries (SEIs), this paper (1) investigates the role of legitimacy acquisition as the mediator through which the two sub levels of social relations (political and business) affecting new venture’s performance. (2) Explores the moderating role of symbolic strategies to further illustrate the conditional nature of legitimacy acquisition. The results show that legitimacy acquisition plays a complete mediating role in the relationship between social relations and new venture’s performance. Symbolic strategy improves the positive effect of political ties on legitimacy acquisition, but weakens the positive effect of business relations on legitimacy acquisition. The findings contribute to the entrepreneurial literature and make significant empirical implications.

Suggested Citation

  • Yunqing Liu & Zekun Dai & Yiting Wu & Fang Da, 2023. "How the Social Relations Affect Performance in Chinese High-tech New Ventures: The Role of Legitimacy Acquisition and Symbolic Strategy," SAGE Open, , vol. 13(4), pages 21582440231, December.
    • Handle: RePEc:sae:sagope:v:13:y:2023:i:4:p:21582440231218780
    DOI: 10.1177/21582440231218780
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/21582440231218780
    Download Restriction: no
    File URL: https://libkey.io/10.1177/21582440231218780?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
    ---><---

    References listed on IDEAS

    as
    1. José Carlos Pinho & Christiane Prange, 2016. "The effect of social networks and dynamic internationalization capabilities on international performance," Post-Print hal-02313305, HAL.
    2. 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.
    3. Zhang, Chuang & Du, Nan & Zhang, Xubing, 2021. "When an interfirm relationship is ending: The dark side of managerial ties and relationship intimacy," Journal of Business Research, Elsevier, vol. 125(C), pages 227-238.
    4. Paul D Ellis, 2011. "Social ties and international entrepreneurship: Opportunities and constraints affecting firm internationalization," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 42(1), pages 99-127, January.
    5. Petra Christmann & Glen Taylor, 2006. "Firm self-regulation through international certifiable standards: determinants of symbolic versus substantive implementation," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 37(6), pages 863-878, November.
    6. Fisher, Greg & Kuratko, Donald F. & Bloodgood, James M. & Hornsby, Jeffrey S., 2017. "Legitimate to whom? The challenge of audience diversity and new venture legitimacy," Journal of Business Venturing, Elsevier, vol. 32(1), pages 52-71.
    7. Huatao Peng & Geert Duysters & Bert Sadowski, 2016. "The changing role of guanxi in influencing the development of entrepreneurial companies: a case study of the emergence of pharmaceutical companies in China," International Entrepreneurship and Management Journal, Springer, vol. 12(1), pages 215-258, March.
    8. Wai Fong Boh & Cheng‐Jen Huang & Anne Wu, 2020. "Investor experience and innovation performance: The mediating role of external cooperation," Strategic Management Journal, Wiley Blackwell, vol. 41(1), pages 124-151, January.
    9. Christine M Chan & Shige Makino, 2007. "Legitimacy and multi-level institutional environments: implications for foreign subsidiary ownership structure," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 38(4), pages 621-638, July.
    10. Yadong Luo & Ying Huang & Stephanie Lu Wang, 2012. "Guanxi and Organizational Performance: A Meta-Analysis," Management and Organization Review, The International Association for Chinese Management Research, vol. 8(1), pages 139-172, March.
    11. Mike W Peng & Denis Y L Wang & Yi Jiang, 2008. "An institution-based view of international business strategy: a focus on emerging economies," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 39(5), pages 920-936, July.
    12. J. Cameron Verhaal & Jake D. Hoskins & Leif W. Lundmark, 2017. "Little Fish in a Big Pond: Legitimacy Transfer, Authenticity, and Factors of Peripheral Firm Entry and Growth in the Market Center," Strategic Management Journal, Wiley Blackwell, vol. 38(12), pages 2532-2552, December.
    13. Brian G. Nagy & Jeffrey M. Pollack & Matthew W. Rutherford & Franz T. Lohrke, 2012. "The Influence of Entrepreneurs’ Credentials and Impression Management Behaviors on Perceptions of New Venture Legitimacy," Entrepreneurship Theory and Practice, , vol. 36(5), pages 941-965, September.
    14. Ronald S. Burt & Sonja Opper, 2020. "Political Connection and Disconnection: Still a Success Factor for Chinese Entrepreneurs," Entrepreneurship Theory and Practice, , vol. 44(6), pages 1199-1228, November.
    15. Pinho, José Carlos & Prange, Christiane, 2016. "The effect of social networks and dynamic internationalization capabilities on international performance," Journal of World Business, Elsevier, vol. 51(3), pages 391-403.
    16. Christopher Marquis & Cuili Qian, 2014. "Corporate Social Responsibility Reporting in China: Symbol or Substance?," Organization Science, INFORMS, vol. 25(1), pages 127-148, February.
    17. Miaomiao Yin & Mathew Hughes & Qilin Hu, 2021. "Entrepreneurial orientation and new venture resource acquisition: why context matters," Asia Pacific Journal of Management, Springer, vol. 38(4), pages 1369-1398, December.
    18. Burt, Ronald S. & Burzynska, Katarzyna, 2017. "Chinese Entrepreneurs, Social Networks, and Guanxi," Management and Organization Review, Cambridge University Press, vol. 13(2), pages 221-260, June.
    19. Xuan Bai & Jeanine Chang & Julie Juan Li, 2019. "How Do International Joint Ventures Build Legitimacy Effectively in Emerging Economies? CSR, Political Ties, or Both?," Management International Review, Springer, vol. 59(3), pages 387-412, June.
    20. Shi, Junguo & Sadowski, Bert & Li, Sihan & Nomaler, Önder, 2020. "Joint Effects of Ownership and Competition on the Relationship between Innovation and Productivity: Application of the CDM Model to the Chinese Manufacturing Sector," Management and Organization Review, Cambridge University Press, vol. 16(4), pages 769-789, October.
    21. Gimenez-Fernandez, Elena M. & Sandulli, Francesco D. & Bogers, Marcel, 2020. "Unpacking liabilities of newness and smallness in innovative start-ups: Investigating the differences in innovation performance between new and older small firms," Research Policy, Elsevier, vol. 49(10).
    22. Garry D. Bruton & Zhongfeng Su & Igor Filatotchev, 2018. "New Venture Performance in Transition Economies from Different Institutional Perspectives," Journal of Small Business Management, Taylor & Francis Journals, vol. 56(3), pages 374-391, July.
    23. Julie Juan Li & Kevin Zheng Zhou & Alan T Shao, 2009. "Competitive position, managerial ties, and profitability of foreign firms in China: an interactive perspective," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 40(2), pages 339-352, February.
    24. Donna Marie De Carolis & Barrie E. Litzky & Kimberly A. Eddleston, 2009. "Why Networks Enhance the Progress of New Venture Creation: The Influence of Social Capital and Cognition," Entrepreneurship Theory and Practice, , vol. 33(2), pages 527-545, March.
    25. Alessandra Rigolini & Morten Huse, 2021. "Women and Multiple Board Memberships: Social Capital and Institutional Pressure," Journal of Business Ethics, Springer, vol. 169(3), pages 443-459, March.
    26. 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.
    27. David Urbano & Sebastian Aparicio & David Audretsch, 2019. "Twenty-five years of research on institutions, entrepreneurship, and economic growth: what has been learned?," Small Business Economics, Springer, vol. 53(1), pages 21-49, June.
    28. Luo, Yadong & Huang, Ying & Wang, Stephanie Lu, 2012. "Guanxi and Organizational Performance: A Meta-Analysis," Management and Organization Review, Cambridge University Press, vol. 8(1), pages 139-172, March.
    29. Xaver Neumeyer & Susana C. Santos & Michael H. Morris, 2019. "Who is left out: exploring social boundaries in entrepreneurial ecosystems," The Journal of Technology Transfer, Springer, vol. 44(2), pages 462-484, April.
    30. Boyd D. Cohen & Thomas J. Dean, 2005. "Information asymmetry and investor valuation of IPOs: top management team legitimacy as a capital market signal," Strategic Management Journal, Wiley Blackwell, vol. 26(7), pages 683-690, July.
    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. Yulia Muratova & Jakob Arnoldi & Xin Chen & Joachim Scholderer, 2018. "Political rotations and cross-province firm acquisitions in China," Asian Business & Management, Palgrave Macmillan, vol. 17(1), pages 37-58, February.
    2. Ziyi Wei & Quyen T. K. Nguyen, 2020. "Local responsiveness strategy of foreign subsidiaries of Chinese multinationals: The impacts of relational-assets, market-seeking FDI, and host country institutional environments," Asia Pacific Journal of Management, Springer, vol. 37(3), pages 661-692, September.
    3. Yuan Li & Haowen Chen & Yi Liu & Mike Peng, 2014. "Managerial ties, organizational learning, and opportunity capture: A social capital perspective," Asia Pacific Journal of Management, Springer, vol. 31(1), pages 271-291, March.
    4. Ebrahim Muhamed Endris & Zhou Xiaoyan, 2021. "Managerial Ties and MNCs’ Performance in Ethiopia: The Moderating Effect of Institutional support," International Journal of Science and Business, IJSAB International, vol. 5(7), pages 215-232.
    5. Jiang, Xu & Liu, Heng & Fey, Carl & Jiang, Feifei, 2018. "Entrepreneurial orientation, network resource acquisition, and firm performance: A network approach," Journal of Business Research, Elsevier, vol. 87(C), pages 46-57.
    6. Yan, Hongmin & Hu, Xiaowen & Liu, Yulong, 2020. "The international market selection of Chinese SMEs: How institutional influence overrides psychic distance," International Business Review, Elsevier, vol. 29(4).
    7. Ruey-Jer ‘Bryan’ Jean & Rudolf R. Sinkovics & Stefan Zagelmeyer, 2018. "Antecedents and Innovation Performance Implications of MNC Political Ties in the Chinese Automotive Supply Chain," Management International Review, Springer, vol. 58(6), pages 995-1026, December.
    8. Wenting Chen & Chunjia Han & Lei Wang & Petros Ieromonachou & Xiaochen Lu, 2021. "Recognition of entrepreneur’s social ties and firm innovation in emerging markets: explanation from the industrial institutional environment and survival pressure," Asia Pacific Journal of Management, Springer, vol. 38(2), pages 491-518, June.
    9. Dejin Su & Qixia Du & Dongwon Sohn & Libo Xu, 2017. "Can High-Tech Ventures Benefit from Government Guanxi and Business Guanxi ? The Moderating Effects of Environmental Turbulence," Sustainability, MDPI, vol. 9(1), pages 1-17, January.
    10. Abosag, Ibrahim & Yen, Dorothy Ai-wan & Barnes, Bradley R. & Gadalla, Eman, 2021. "Rethinking guanxi and performance: Understanding the dark side of Sino–U.S. business relationships," International Business Review, Elsevier, vol. 30(4).
    11. Ju, Wei & Zhou, Xiaohu & Wang, Shuaibin, 2019. "The impact of scholars’ guanxi networks on entrepreneurial performance—The mediating effect of resource acquisition," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 521(C), pages 9-17.
    12. Cheng, Louis T.W. & Chan, Ricky Y.K. & Leung, T.Y., 2018. "Impact of perk expenditures and marketing expenditures on corporate performance in China: The moderating role of political connections," Journal of Business Research, Elsevier, vol. 86(C), pages 83-95.
    13. 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.
    14. 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.
    15. White, George O. & Fainshmidt, Stav & Rajwani, Tazeeb, 2018. "Antecedents and Outcomes of Political Tie Intensity: Institutional and Strategic Fit Perspectives," Journal of International Management, Elsevier, vol. 24(1), pages 1-15.
    16. Lee, Tingko, 2019. "Management ties and firm performance: Influence of family governance," Journal of Family Business Strategy, Elsevier, vol. 10(2), pages 105-118.
    17. Shen, Lu & Zhang, Chuang & Teng, Wenbo & Du, Nan, 2022. "How do business and political Networking shape overseas dispute resolution for state-owned enterprise from emerging economies," International Business Review, Elsevier, vol. 31(1).
    18. 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.
    19. Brache, Jose & Felzensztein, Christian, 2019. "Exporting firm’s engagement with trade associations: Insights from Chile," International Business Review, Elsevier, vol. 28(1), pages 25-35.
    20. Zelong Wei & Hao Shen & Kevin Zheng Zhou & Julie Juan Li, 2017. "How Does Environmental Corporate Social Responsibility Matter in a Dysfunctional Institutional Environment? Evidence from China," Journal of Business Ethics, Springer, vol. 140(2), pages 209-223, January.

    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:sae:sagope:v:13:y:2023:i:4:p:21582440231218780. 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: SAGE Publications (email available below). General contact details of provider: .

    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.