The contingent value of managerial ties for new ventures during China’s anti-corruption campaign

ABSTRACT

The tie-based non-market strategy has been widely adopted by new ventures to gain a competitive advantage in China. However, the recent anti-corruption campaign may have profound influences on business practices, particularly on the utilization or leveraging of managerial ties for improving firm performance. This study explored the critically important but fairly underexplored research question of whether managerial ties continue to create value for new ventures under China’s anti-corruption campaign. Based on a sample of Chinese listed firms consisting of new ventures, this study found that business ties and political ties have produced divergent effects on the performance of new ventures since China’s anti-corruption campaign took effect. Moreover, a wider coverage or scope of anti-corruption increased the benefits of business ties and political ties, while a higher intensity of anti-corruption facilitated the role of anti-corruption scope on increasing the benefits of managerial ties for better performance of new ventures.

KEYWORDS:

• Managerial ties
• political ties
• new ventures
• anti-corruption
• China

JEL CLASSIFICATION:

• M21
• P20
• P37

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

¹ In 2012, the Eighteenth CPC National Congress was held in Beijing. The Chinese government, led by its then new leader, President Jinping Xi, put forward the ‘anti-corruption campaign’ as a critical national governance institution to ensure sustainable social and economic development over the long term.

Additional information

Funding

This study was supported by National Natural Science Foundation of China (71672138, 71572142; 71832009), China Postdoctoral Science Foundation (2017M620461).