Impact of political connections on Chinese export firms' performance – Lessons for other emerging markets

Piyush Sharma; Louis T.W. Cheng; T.Y. Leung

doi:10.1016/j.jbusres.2019.08.037

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Impact of political connections on Chinese export firms' performance – Lessons for other emerging markets

Journal article

Open access

Peer reviewed

Impact of political connections on Chinese export firms' performance – Lessons for other emerging markets

Piyush Sharma, Louis T.W. Cheng and T.Y. Leung

Journal of Business Research, Vol.106, pp.24-34

2020

DOI: https://doi.org/10.1016/j.jbusres.2019.08.037

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Abstract

China

Emerging markets

Export performance

Political connections

Private-owned

State-owned enterprise

This paper explores the differences in the impact of political connections on the performance of Chinese exporter and non-exporter firms and among three types of exporter firms; private-owned (POE), local state-owned (LSOE) and central state-owned (CSOE). Our sample has 7326 firm-year observations from 1945 firms listed on Shanghai and Shenzhen stock exchanges during 2006–2010 period. Using export sales, ratio of export to total sales and return on assets as the performance indicators, we find significant positive effects of political connections on Chinese firms' decisions to enter export markets and on their subsequent export performance. We also find significant differences in these effects based on the type of firm ownership (i.e., POE, LSOE and CSOE). Besides extending research linking political connections and export performance, our study would also help researchers, managers and policy-makers in the emerging markets understand the pros and cons of using political connections to drive export performance.

Details

Title: Impact of political connections on Chinese export firms' performance – Lessons for other emerging markets
Authors: Piyush Sharma (Corresponding Author) - Curtin University
Louis T.W. Cheng (Author) - Hong Kong Polytechnic University
T.Y. Leung (Author) - Hong Kong Metropolitan University
Publication details: Journal of Business Research, Vol.106, pp.24-34
Publisher: Elsevier Inc
Date published: 2020
DOI: 10.1016/j.jbusres.2019.08.037
ISSN: 1873-7978; 0148-2963
Organisation Unit: School of Business and Creative Industries
Language: English
Record Identifier: 99710572302621
Output Type: Journal article

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Collaboration types: Domestic collaboration; International collaboration
Web Of Science research areas: Business