Author: Wu Jianfeng Cheng Menita Liu
Publisher: Emerald Group Publishing Ltd
ISSN: 1750-614X
Source: Chinese Management Studies, Vol.5, Iss.2, 2011-06, pp. : 207-226
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Abstract
Purpose ‐ The purpose of this paper is to adopt a contingency perspective and examine the impact of managerial political connections on access to a specific external resource ‐ government subsidies ‐ in China. Design/methodology/approach ‐ This study proposes that managerial political connections help firms gain access to government subsidies; in addition, firms must signal their managerial quality through managerial reputation and/or past firm performance to address government officials' concerns with job safety and future career development. These cues, in turn, ensure and increase confidence on government officials' resource allocation decisions in favor of the firm. The authors test the contingency hypothesis by using archival data collected from 212 Chinese firms that went public between 2002 and 2004. Findings ‐ This study finds that managerial political connections play a significant positive impact on obtaining government subsidies only when managerial reputation is high, and/or when firm past performance is superior
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