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Despite the extensive controversy over to what extent corruption greases or throws sand into the gears of economic activity, there has been little scholarly work examining how bribery influences a firm's performance when a norm of corruption and an anti-corruption regime co-exist. Drawing on institutional theory, this study explored the idea that paying bigger bribes does not always predict above-average financial performance. The level of bribery accepted by social norms in a particular market is also influential. Deviation from corruption norms is subject to punishment by both informal institution and formal anticorruption enforcement agencies. Strengthening either sort of institution enhances the negative effect. Our empirical findings based on private industrial firms operating in China from 2003 to 2007 support these arguments. [ABSTRACT FROM AUTHOR]

With the hybrid nature of government agencies and market players, state-owned enterprises (SOEs) tend to play multiple roles when they conduct FDI in host countries that receive aid from their home country. Bridging the literature that studies the impact of aid on FDI with the research on SOEs, we propose that SOEs are more likely to make FDI in aid recipient countries than privately-owned enterprises (POEs) from the same country. In addition, SOEs' FDI in recipient countries not only mediates the positive impact of aid on POEs' FDI in recipient countries, but also strengthens the impact as a moderator. Empirical research based on data of 3,758 Chinese FDI projects in Africa during 2001-2015 delivered support to the above arguments. The findings of this study extend the research on the relationship between aid and FDI, as well as the SOE literature. [ABSTRACT FROM AUTHOR]

While much of the agency literature focus on the utility-maximization differences between principals and agents, less is understood about how individual-level factors interact with these situational differences in perspective. We develop a sociocognitive theory of agency that explains the interaction between the individual's cognitive processing style and agency role. Integrating construal level theory with agency theory, we describe how agency roles provide differently ordered aspect hierarchies, through which individuals conceptualize decisions. As the aspect hierarchies of both principal and agent perspectives contain risk and return, the interplay with construal level determines which aspect is used to conceptualize the decision. We illustrate how traditionally labelled principals and agents both may exhibit varying degrees of risk taking based on how abstractly they think about decisions. Consequently, it is necessary to account for individual-level cognitive processing styles when explaining how interpersonal agency differences affect decision-making. By emphasizing the dynamic nature of decision conceptualization, we provide a framework for addressing agency conflicts based on influencing which aspects are used to evaluate decisions. [ABSTRACT FROM AUTHOR]

Firms compete with each other not only with market-based competitiveness (e.g. technology, brand, scale, etc.) but also with social based ones. In emerging markets where multinational enterprises (MNEs) typically carry superior market-based competitive advantages, local firms may leverage their institutional embeddedness and invest in social capital to fight back. Taking a competitive rivalry perspective, we argue that social capital investment by local firms may effectively hurt MNE subsidiaries¡¯ performance, especially when the resource profiles between the local firms and MNEs are overlapping. MNEs may cope with such competition based on social capital either by further differentiating their market-based competitiveness or by offsetting their disadvantages by also engaging in social capital investment in the host market. An empirical study based on four-year panel data of 29,789 foreign-invested firms in China provided support for these arguments. [ABSTRACT FROM AUTHOR]

Prior research has shown mixed findings on the relationship between international diversification and a firm's innovation performance. Taking a knowledge-based perspective and drawing on the learning theory and organizational diversity literature, this paper argues that this could be due to the confusion of three effects of international diversification on innovation, i.e. the positive effect of market variety (the extent to which a firm's activities spread over many geographically defined markets), the negative effect of market separation (the dissimilarity between these different geographically defined markets), and the negative effect of market disparity (the inequality in the distribution of activities in different geographically defined markets). We argue that market variety provides firms with a better opportunity to build a diverse set of knowledge, the novel combinations of which giving rise to innovation. However, market separation and disparity can lead to substantial difficulties in knowledge transfer, sharing and integration. An empirical study with data on Chinese manufacturers with at least US$600,000 annual sales during 2005-2007 provides partial support to these arguments. The results show that firms competing in a variety of foreign markets tend to be more innovative than firms competing in only one foreign market. The average institutional distance between China and these foreign markets tends to reduce firms innovation. The effect of market disparity, however, is not robust. [ABSTRACT FROM AUTHOR]

How do business idea sources, entrepreneurs' background, and institutional environment at the time of founding interplay to influence the performance of entrepreneurial ventures? Combining resource-based view with an institutional perspective, we bridge the research on business idea sources and entrepreneurs' background, and propose that when environment is rich in institutional voids, entrepreneurial ventures with initial business ideas chosen beyond entrepreneurs background expertise (i.e. a complementary strategy) are more successful than other ventures. To the contrary, startups with initial business ideas chosen within entrepreneurs background expertise (i.e. a consistent strategy) are more successful in the presence of fewer institutional voids. An empirical study conducted with a unique dataset with information on 1003 entrepreneurial ventures setup from 1988 to 2007 in China delivered results that support the above arguments. The results are robust across different samples and measures of key variables. [ABSTRACT FROM AUTHOR]

How do local rivals investments in social capital influence the performance of foreign-invested firms in emerging economies? Combining both agency theory and resource-based theory with a competitive rivalry perspective, we argue that the extent to which foreign-invested firms are influenced by rivals social capital investment depends on 1) whether these investments successfully transform into social capital, 2) the level of rivalry between rivals and foreign-invested firms, and 3) the level of government intervention in the competitive environment. An empirical study based on four-year panel data of 30,060 foreign-invested firms in China delivered partial support to our arguments. Specifically, we found that, compared with social capital investment made by privately owned enterprises (POEs) and other foreign-owned enterprises (FOEs), those made by state-owned enterprises (SOEs) are less likely to hurt the performance of FOEs. Additionally, FOEs that have cumulated more intangible assets or operated in high-tech industries are less likely to be influenced by the social capital investment made by local rivals China. Contrary to our expectation, government intervention tends to reduce rather than enhance the negative impact of local rivals social capital investment on the performance of FOEs. [ABSTRACT FROM AUTHOR]

Prior research on CEO succession has largely focused on CEO attributes and had limited consideration of the interface between the new CEO and the top management team (TMT). This study intends to examine how CEO-TMT relational demography, the comparative demographic similarity or difference of the new CEO and the other TMT members, is related to post-succession strategic change. We developed and tested hypotheses using data from 224 successions from 2005 to 2010 in Chinese manufacturing listed firms. We posit that CEO-TMT job-related demographic difference is positively associated with strategic change by contributing to CEO-TMT knowledge distinctiveness in terms of strategy initiation, and CEO-TMT job-unrelated demographic similarity is positively associated with strategic change by fueling CEO-TMT social coherence in terms of strategy implementation. The positive effect of job-related demographic difference was found to be stronger while the positive effect of job-unrelated demographic similarity was found to be weaker when CEO managerial discretion was stronger. [ABSTRACT FROM AUTHOR]