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

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...

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Bibliographic Details
Published inAsia Pacific journal of management Vol. 29; no. 3; pp. 799 - 818
Main Authors Li, Weiwen, He, Ai, Lan, Hailin, Yiu, Daphne
Format Journal Article
LanguageEnglish
Published Boston Springer US 01.09.2012
Springer Nature B.V
Subjects
Business and Management
Diversification
Diversified companies
Economic growth
Economic theory
Emerging markets
Hypotheses
Hypothesis testing
Labor market
Management
Management theory
Political behavior
Political economy
Public enterprise
Strategic management
Studies
China
Emerging economy
Political connections
Corporate diversification
Resource-based view
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Summary: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.
ISSN:0217-4561
1572-9958
DOI:10.1007/s10490-011-9265-5