Heterogeneity of political connections and outward foreign direct investment

Deng, Ziliang; Yan, Jiayan; Essen, Marc van

doi:10.1016/j.ibusrev.2018.02.001

Cited by 76 publications

(97 citation statements)

References 82 publications

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“…OFDI commitment refers to the willingness to devote considerable effort to overseas investments. We measured OFDI commitment in three dimensions: OFDI propensity, OFDI intensity, and institutional distance of OFDI (Deng et al 2018;Xia et al 2014). OFDI propensity is measured by a dummy variable (OFDI dummy), which equals to 1 if the enterprise undertakes OFDI in a certain year and 0 otherwise.…”

Section: Ofdi Commitmentmentioning

confidence: 99%

“…Given that much of the existing research is primarily based on the Western context, prior findings may not be entirely applicable for the case of emerging economy firms. Since firms' OFDI commitment embodies propensity, intensity, and institutional distance of overseas expansion (Deng et al 2018), we suggested that functional background heterogeneity can bring in multilevel knowledge and broaden TMT understanding of international expansion, hence increasing the OFDI commitment of emerging economy firms. As tenure heterogeneity may generate more internal conflicts among TMT members and impede the process of knowledge acquisition and team learning (Carpenter 2002), it will likely decrease OFDI commitment.…”

Section: Introductionmentioning

confidence: 99%

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Heterogeneity in top management teams and outward foreign direct investment: evidence from Chinese listed companies

Meng

Yan

Cao

2019

Front. Bus. Res. China

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Drawing upon the knowledge-based view and team learning, we investigated how heterogeneity in top management teams (TMTs) in China influences global expansion strategies. Using panel data from Chinese listed firms from 2008 to 2014, we found that TMT functional background heterogeneity could positively affect firms' commitment to outward foreign direct investment (OFDI), as the diversification of TMT members can enrich the team's knowledge, facilitate efficient team learning, and enhance the decision-making capacity on overseas expansion. However, tenure heterogeneity may hinder knowledge acquisition and team learning among TMT members, hence undermining firms' OFDI commitment.

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Section: Ofdi Commitmentmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Heterogeneity in top management teams and outward foreign direct investment: evidence from Chinese listed companies

Meng

Yan

Cao

2019

Front. Bus. Res. China

Self Cite

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“…As agents of the government, SOEs have inherent PCs to the government (Deng et al, 2018). We further distinguish SOEs that have PCs with the central government as (Su and Fung, 2013).…”

Section: Methodsmentioning

confidence: 99%

“…While PCs are a formal and informal tie between enterprises and the government, different kinds of PCs ©2019 Institute of World Economics and Politics, Chinese Academy of Social Sciences have different effects on enterprise innovation as they imply different degrees of access to resources. SOEs are intrinsically linked to the government as they are primarily controlled by the government (Deng et al, 2018), and government affiliation at different levels has different influences on enterprise innovation performance. Chinese enterprises affiliated with the central government are directly monitored by the State-owned Assets Supervision and Administration Commission of the State Council, a branch of the central government.…”

Section: Literature Review and Hypothesis Development 1 Politicamentioning

confidence: 99%

Do Political Connections Promote Innovation in Environmentally Polluting Enterprises?

Zhang

Fung

et al. 2019

China and World Economy

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We use an unbalanced panel data analysis to examine the effect of political connections (PCs) in state-owned enterprises (SOE) and non-SOEs on the innovation of Chinese environmentally polluting enterprises listed on the Shanghai and Shenzhen Stock Exchanges from 2007 to 2016. Our sample consists of 792 firms and 4587 firm-year observations. There are several interesting findings. First, SOEs that are politically linked to the central government promote more innovation in general and more environmental innovation than SOEs without these links. Second, privately-owned enterprises (non-SOEs) with PCs promote less environmental innovation than non-SOEs without PCs. Third, environmental regulation does not affect the environmental innovation of SOEs but it drives non-SOEs with PCs to become more environmentally innovative. Our results enable us to better understand how PCs and regulations affect environmental innovation.

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“…Nonetheless, business-political linkages are heterogeneous; some are natural, apparent and formal, while others are opportunistic, hidden and informal (Boisot & Child, 1996;Sun, Mellahi, Wright, & Xu, 2015). Political connections, which may belong to the latter (Deng, Yan, & van Essen, 2018), refer to informal networking ties between firms and the government or state (Faccio, Masulis, & McConnell, 2006).…”

Section: Introductionmentioning

confidence: 99%

Too much reciprocity?

Sun

2020

CMS

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Purpose Using the evidence of Chinese outbound mergers and acquisitions (M&As) enacted between 2006 and 2014, this study aims to investigate the role played by home political connections on the cost implications of Chinese multinationals. It also examines whether home political connections – at different levels and of different configurations – impact the operational cost of Chinese multinationals. Design/methodology/approach The data were analysed using a multivariate regression model. To examine their heterogeneous effect on Chinese multinationals, the political connection data were further split into higher and lower level political connections and in chief executive officer (CEO) and chairperson political connections. Findings This study implies the negative effect of home political connections on the internationalisation of Chinese multinationals. At the same time, the impact of lower-level political connections is stronger than that of their higher-level counterparts. Moreover, CEO political connections have a stronger effect on the operational costs of Chinese multinationals than their Chairperson equivalents. Originality/value By unravelling the “black box” of Chinese internationalisation from the social exchange perspective, through the informal political connection networking ties between Chinese firms and the government, this study advances emerging market multinational theory, contributes to the understanding of the heterogeneous nature of political connections and sheds new light on social exchange theory from the perspective of the emerging phenomenon of Chinese internationalisation.

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Heterogeneity of political connections and outward foreign direct investment

Cited by 76 publications

References 82 publications

Heterogeneity in top management teams and outward foreign direct investment: evidence from Chinese listed companies

Heterogeneity in top management teams and outward foreign direct investment: evidence from Chinese listed companies

Do Political Connections Promote Innovation in Environmentally Polluting Enterprises?

Too much reciprocity?

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