These three papers were initially intended to be used for my dissertation for the Ph.D. degree in International Business. Below are the abstracts together with links (if available).
#1 - “Institutional Changes, Organizational Adaptation, and Corporate Political Connections”, working paper, reframing, target: Administrative Science Quarterly. link
Abstract: The literature on business-state relations in developing countries traditionally posits a harmonious dynamic, emphasizing benefits such as access to low-cost capital and improved information for firms. This study departs from this consensus, introducing a nuanced perspective by distinguishing political capital into two types: political connections and political embeddedness. Extending resource dependence theory, this research examines when political capital becomes a liability, specifically predicting unilateral power restructuring operations in cases of power imbalances. Focusing on Chinese listed firms, the study investigates their U.S. ADR listing behaviors against the backdrop of the Chinese government’s efforts since 2012 to fortify the power of the China Communist Party and temper the influence of market forces. The core question centers on whether firms, when faced with a power-advantageous government, strategically opt for U.S. ADR listing. Empirical findings reveal that firms with substantial political capital are inclined to choose U.S. ADR listing when the government holds a power advantage. However, as this power imbalance intensifies, firms with political connections may deviate from this trend. This study sheds light on the strategic responses to power imbalances, showing how they safeguard their interests by incorporating third-party. The implications contribute to a broader understanding of firms navigating intricate relationships with governments and external markets.
#2 - “Microfoundations of Corporate Political Connections: Opinions, Beliefs, and R&D Investments”, working paper.
Abstract: This study examines the relationship between corporate political connections (CPCs) and firm innovation investments, focusing on the individual-level characteristics of politically connected individuals. Departing from prior research that assumes uniform effects of politically connected individuals, this study argues that personal backgrounds significantly influence decisions on corporate innovation investments. Using panel data from 2004 to 2019 for Chinese publicly listed firms, time-fixed effects regression models reveal how attributes such as age, tenure, education, and political affiliations shape R&D spending. Older politically connected individuals positively influence R&D investments, while longer tenure and higher education levels are associated with reduced R&D spending. The number of Chinese Communist Party (CCP) members and former government bureaucrats negatively correlates with innovation investments, reflecting risk aversion and compliance-driven priorities. In contrast, National People’s Congress (NPC) and Chinese People’s Political Consultative Conference (CPPCC) members and politically connected independent board members positively affect R&D spending by leveraging political networks. These findings contribute to the CPC literature by highlighting individual heterogeneity and advance microfoundations research by exploring how CPCs shape innovation. Implications for practitioners and policymakers are discussed, along with directions for future research on political connections and firm performance.
#3 - Aggregation or Constraint? Organizational Decision Making, Corporate Political Connections, and R&D Investment, working paper.
Abstract: This study examines the impact of reconciled conflicts among decision-makers on organizational innovation investments, focusing on the context of corporate political connections (CPCs) in Chinese listed firms. Drawing on the behavioral theory of the firm, we argue that conflicts arising from diverse backgrounds and goals within decision-making teams can either facilitate or hinder innovation. Using a panel dataset of Chinese firms from 2004 to 2019, we find that higher reconciled conflicts are positively associated with increased R&D spending and personnel allocation to innovation activities. However, this effect is moderated by firm size and state-owned enterprise (SOE) status. Larger firms and SOEs exhibit weaker relationships between reconciled conflicts and innovation investments, suggesting that bureaucratic complexity and government influence constrain the potential of conflict reconciliation to drive innovation. This study contributes to the organizational decision-making literature by highlighting the role of conflict resolution in innovation outcomes and advances the CPC literature by providing insights into how political connections shape R&D decisions. Our findings have important implications for managers, policymakers, and researchers seeking to understand the dynamics of innovation in politically connected organizations.