Impact of Chinese firms’ political connections on EVA performance: the moderating roles of connection heterogeneity and product diversification
ISSN: 1750-614X
Article publication date: 24 May 2021
Issue publication date: 17 January 2022
Abstract
Purpose
This paper aims to explore the impact of a firm’s political connections on its economic value added (EVA) performance while treating connection heterogeneity and product diversification as moderators.
Design/methodology/approach
Based on data collected from 1,143 Chinese manufacturing listed firms in China’s A-share market from 2012 to 2017, this study conducted panel data analysis to investigate proposed relationships.
Findings
The findings provide evidence that political connections promote EVA performance of enterprises and both connection heterogeneity and product diversification negatively moderate the political connections – EVA performance relationship.
Originality/value
Drawing sights from the resource-based view, this study investigates the influence of corporate political connections on EVA performance, considering contingent factors of connection heterogeneity and corporate strategy (i.e. product diversification). It, thus, contributes to the literature on political connections by providing additional evidence to explaining the inconclusive findings on the political connections–firm performance relationship and extending prior research by emphasizing the moderating roles of connection heterogeneity and corporate strategy. It also complements prior research on EVA performance by exploring its antecedents.
Keywords
Citation
He, X. and Chen, A. (2022), "Impact of Chinese firms’ political connections on EVA performance: the moderating roles of connection heterogeneity and product diversification", Chinese Management Studies, Vol. 16 No. 1, pp. 211-230. https://doi.org/10.1108/CMS-09-2020-0377
Publisher
:Emerald Publishing Limited
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