Journal article
Impact of perk expenditures and marketing expenditures on corporate performance in China: The moderating role of political connections
Journal of Business Research, Vol.86, pp.83-95
2018
Abstract
This study examines the performance implications of guanxi-related perk expenditures among listed Chinese firms. Specifically, it investigates how these expenditures influence long-term market-based corporate performance (Tobin's Q and market share) as compared with marketing expenditures. It also examines if political connections moderate this influence. Overall, the findings suggest that guanxi-related perks play an essential marketing role in enhancing long-term corporate success. Furthermore, although marketing expenditures exert much stronger influence on Tobin's Q than guanxi-related perks do, they exert no significant influence on market share. In summary, despite firms' much heavier investments in traditional marketing activities than guanxi-related perk activities, the findings highlight the significant performance contribution that guanxi-related perks can still make to a firm. Moreover, this study reveals that political connections weaken the positive impact of guanxi-related perks on both performance measures, thus reminding executives of the dampening effect of these connections on the effective use of perk spending.
Details
- Title
- Impact of perk expenditures and marketing expenditures on corporate performance in China: The moderating role of political connections
- Authors
- Louis T.W. Cheng (Corresponding Author) - Hong Kong Polytechnic UniversityRicky Y.K. Chan (Author) - Hong Kong Polytechnic UniversityT.Y. Leung (Author) - Open University of Hong Kong
- Publication details
- Journal of Business Research, Vol.86, pp.83-95
- Publisher
- Elsevier Inc
- DOI
- 10.1016/j.jbusres.2018.01.046
- ISSN
- 1873-7978
- Organisation Unit
- School of Business and Creative Industries
- Language
- English
- Record Identifier
- 99708571602621
- Output Type
- Journal article
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