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This study investigates how and under which conditions political ties affect firm performance in a transition economy. Using the network-based view of social capital, we first distinguish between the two stages of accessing and mobilizing social capital in political ties, and then focus on network exploitation of political ties, proposing that government support acts as a mechanism that converts political ties into firm performance. We further examine the role of two personal traits of CEOs—political utilization orientation and prosocial orientation—in moderating this relationship. Using multi-source data from 626 small and medium-sized enterprises in China's transition economy, we find that the effect of political ties on firm performance largely depends on the extent to which political ties can be utilized, and that the CEO's political utilization orientation and prosocial orientation positively moderate this relationship. The implications of our findings for theory and practice are discussed. [ABSTRACT FROM AUTHOR]

State-owned enterprises (SOEs) and their liabilities have been extensively examined in the literature. However, less attention has been paid to how SOEs overcome such liabilities and even flourish in a market transition from a centrally planned economy to a market-based one. This study explores how China's SOEs continue to thrive in a system where state and market logics co-exist. The state appears to arrange an institutional field favoring SOEs, which are likely to transact and interact with co-located market-based firms, from which they acquire market logic elements through knowledge spillover. Three different market-based forms—previous SOEs that have been privatized, new privately owned enterprises, and foreign-owned enterprises—enhance the survival chances of SOEs. Each market-based form is established for different reasons and operate through different processes, incorporating market logic elements and developing the ease of communication that affect how SOEs obtain market logic elements. Furthermore, government affiliation and industry structure generate different levels of support and demands for SOEs, and thus not all SOEs benefit equally from obtaining market logic elements. [ABSTRACT FROM AUTHOR]

What type of investment strategies are effective for foreign venture capital (VC) firms investing in transition economies? This is the research question we address in this paper by analyzing recent institutional developments and investment activities of foreign VC firms investing in China. We find that foreign VC firms identify China as lacking fully-developed institutions necessary to effectively support VC investing. We further find that foreign VCs have evolved unique proactive, hands-on investment strategies via a bumpy road of investing in China: initially dominating the Chinese VC industry, but since the great financial recession playing a still-significant but reduced and disadvantaged-role subservient to the rapidly increasing role of domestic VC firms. We developed a novel triangulation research methodology that allows us to provide significantly more depth in our analysis of how foreign VCs compete in transition economies. This research contributes to both the institutional theory and VC investing literatures. We suggest that foreign VCs can increase their competitive advantage by developing hands-on value-added investing strategies, when investing in transitioning markets. [ABSTRACT FROM AUTHOR]

Academic interest in corporate venturing (CV) has grown considerably over the past decade, given its importance to corporate transformation and improvement. Prior research emphasized the effect of the external market environment on CV, neglecting the role of nonmarket arenas in supplying resources and opportunities to incumbent firms as a potentially vital antecedent to CV activities. This paper brings attention to the important but ignored role of corporate philanthropy, which has been employed by private firms to build their political legitimacy and garner the resources and opportunities needed in their external corporate venturing (ECV) activities. Drawing on institutional theory, in particular the notion of political legitimacy, this paper first tests the relationship between corporate philanthropy and ECV. It then unveils the varying moderating roles of three types of political connections (i.e., exploiting entrepreneurs' prior governmental working experience, being political council members and affiliating with the All-China Federation of Industry and Commerce) that influence the proposed relationship. Research findings from 1,574 entrepreneurial private firms in China support our theoretical predictions. This paper advances the CV literature by introducing a nonmarket strategy explanation to the antecedent of ECV and specifying the simultaneous effect of corporate philanthropy and political connections on ECV. [ABSTRACT FROM AUTHOR]

This study investigates whether corporate philanthropy is used as a countermeasure after product-harm crises in China, as a prime example of an emerging/transitional economy. From the lens of legitimacy theory, we argue that corporations may increase their post-crisis philanthropic giving for social legitimacy repair. By a difference-in-differences (DiD) design, we find significant increases in post-crisis philanthropic giving by corporations involved in product-harm crises. The positive relationship between philanthropic giving and product-harm crises is more pronounced for corporations with higher demand for social legitimacy repair (e.g. non-state-owned enterprises and corporations with scattered customer bases). We find that corporations' philanthropic engagement in fact contributes to regaining support from customers and suppliers. Overall, we provide a perspective emphasizing the strategic significance of social legitimacy in the view of managers and extend the literature about legitimacy management, crisis management, and the drivers of corporate philanthropy. Our findings also suggest practical implications regarding crisis management and legitimacy repair for corporate managers. [ABSTRACT FROM AUTHOR]

This study explores the impact of local protectionism on outward foreign direct investment (OFDI) and how firms respond to local protectionism in a transition economy. We find that local protectionism exerts a negative effect on the OFDI decisions of Chinese privately-owned enterprises (POEs). However, this negative impact is weakened by POEs' corporate philanthropy strategy, whereas corporate political activity reinforces such an impact. This research extends the lens of institutional escapism by highlighting local protectionism as a barrier to OFDI and provides new insights into how firms respond to the subnational environment by adopting various nonmarket strategies. [ABSTRACT FROM AUTHOR]

To increase the understanding of entrepreneurship in China and contribute to the view that deregulation facilitates the rapid development of the private sector in transitional economies, we examine the positive relationship between entrepreneurial attention to deregulation (formal institution at the country level) and reinvestment by Chinese private firms. We supplement this main aim by identifying two moderating factors: the entrepreneurs' political connections (informal institution) and the regional institution development (formal institution at the regional level). We also explore how the interaction of political connections and regional institution development moderate the "entrepreneurial attention to deregulation-reinvestment" link. We find support for our hypotheses from survey data on 3,284 private firms in China. This paper contributes to the research on the relationship between institution and entrepreneurship in general and the association of deregulation and reinvestment in particular by considering two categories of institutional arrangements (formal and informal institutions; national and regional institutions) simultaneously and by exploring the antecedent of reinvestment from a fresh perspective—the attention-based view, highlighting the importance of "noticed" or "perceived" deregulation that influences entrepreneurial decision-making. [ABSTRACT FROM AUTHOR]

Mathews ( Asia Pacific Journal of Management, 23(1): 5-27, 2006) argues for the importance of latecomer firms undertaking international expansion through the three pillars of resource linkage, leverage, and learning (LLL). We argue that these pillars can be discussed in terms of an institutional framework that explains how institutions shape resource access and economic actions. Despite their lack of capabilities vis-à-vis established multinationals, latecomers are not passive observers or recipients, but can be institutional entrepreneurs who are potentially reflexive enough to leverage their institutional linkages to acquire resources and develop learning activities for innovation, transformation, and internationalization. To illustrate our idea, we study the Taiwan-based dragon multinational, Acer, from 1976 to 2014. Three institutional blocks that underlie Acer's engagement with institutional linkage, leverage, and learning are emphasized: the cultural system built around the norms of the Chinese family business; the political system defined by the distinct pattern of state-business relations in Taiwan; and a technological system constructed by multiple global players in the computer industry. [ABSTRACT FROM AUTHOR]

Integrating the linkage, leverage, and learning (LLL) model with institutional economics, this paper develops a moderated mediation framework to examine the relationship between internationalization and the performance of multinational enterprises from latecomer economies (latecomer MNEs). In the framework, whether a latecomer MNE may succeed in learning and knowledge-led profit gains from internationalization is contingent on the development of market-oriented institutions in the country in which it is based. Latecomer MNEs based in countries with a high level of the development of market-oriented institutions are likely to succeed in learning to obtain knowledge-led profit gains from internationalization. Latecomer MNEs based in countries with a low level of the development of market-oriented institutions are likely to experience a breakdown in learning, and a failure in knowledge-led profit gains from internationalization. This paper provides robust evidence on the relationship between internationalization and the performance of latecomer MNEs conditional on the development of market-oriented institutions in their home countries, and discusses strategic implications for latecomer MNE managers. [ABSTRACT FROM AUTHOR]

This study tests the prescience of John Mathews' linkage-leverage-learning (LLL) model to explain internationalization by latecomer firms (LFs)-set in an evolutionary backdrop. The hypothesis harbored in this study is that while LLL explains how LFs initially compete in international markets, it is autonomous learning, independent of LLL that is crucial to internationalization. We used panel data from 1994 to 2012 with 821 observations from 69 firms and performed multiple econometric analyses to test our hypotheses. Our results suggest that autonomous learning rather than resource leverage and learning through linkages with MNCs explain the success of Indian pharmaceutical LFs. LFs progress from being a recipient of knowledge in a global production network to a phase where they can become important contributors in the global innovation network. This study therefore demonstrates that LFs that invest in autonomous learning in addition to reaping advantages through their linkages with global innovators are the ones that are successful in their internationalization process and are able to become dominant players in the global market. [ABSTRACT FROM AUTHOR]

This paper examines how ties to large-scale state-owned enterprises and ties to banks affect firm performance in emerging economies. The findings, obtained from survey data collected from 208 firms in the Chinese manufacturing industry, indicate that both categories of ties improve firm performance. The value of the two categories of ties changes in organizational contexts that vary in terms of the moderators of size, age, and firm strategy. Specifically, ties to banks improve the performance of younger firms significantly more than that of older firms, while ties to large-scale state-owned enterprises improve the performance of smaller firms significantly more than that of larger firms. [ABSTRACT FROM AUTHOR]

This paper investigates whether and how corporate giving is affected by a firm's perceived degree of environmental uncertainty in the context of a transition economy. Evidence from a nationwide survey of private firms across China suggests that both regulatory uncertainty and market uncertainty in a transition economy motivate firms to conduct corporate giving. Further, a firm's political ties and financial performance alleviate its response to environment pressures. Specifically, both political ties and financial performance reduce the impact of regulatory uncertainty on both giving probability and amount, but neither affects market uncertainty's impact. This study illustrates the role of environmental uncertainty in driving corporate social behavior among Chinese private firms, and provides valuable insights for corporate giving in other transition economies. [ABSTRACT FROM AUTHOR]

Research on multinational enterprises that originate from emerging economies has highlighted the importance of the home country for firms' strategies of internationalization. In this paper, we outline a simple analytical framework linking institutions and resource munificence in the home country to the domestic business eco-system in an emerging economy, and thereby to strategies of outward investments. Specifically, we argue that businesses interact with each other in their home economy, and these patterns of interactions influence strategies of internationalization as companies not only compete with each other, but share resources, coordinate actions and serve as each other's role model. Strategies of outward investment thus reflect the competition and collaboration in their home country business eco-system. [ABSTRACT FROM AUTHOR]

Drawing upon data from the Forbes 2015 China Rich List this perspective paper describes the changing nature of entrepreneurial opportunity and capital accumulation in China's transitional economy. The Forbes list identifies some 400 billionaires in 2015, and based upon their year of birth, we break down this list into three age cohorts, which reflect the shifting institutional environments and the set of opportunities they encountered in early adulthood. We identify the origins of their wealth and point to the growing number of wealthy heirs to the enterprises founded by their forebears and the implications for succession and the management of these enterprises. We compare and contrast China's billionaires with comparable lists of billionaires in the United States. We provide insights into the fields of entrepreneurial opportunity, entrepreneurial finance, and the role of self-made versus inherited billionaires, as well as the implications for China's industrial restructuring as the economy moves toward service and innovation-based industries. The paper concludes with a discussion of research opportunities afforded by the study of rich lists. [ABSTRACT FROM AUTHOR]

Transition economies have become a new frontier for multinational enterprises (MNEs). This has introduced a highly dynamic competitive environment for domestic firms operating with such less developed institutions, especially those facing the threat of MNEs with superior capabilities. Drawing on the awareness-motivation-capability framework from the competitive dynamics literature, this paper develops a three-round framework that explores the evolution of the dynamic capabilities of domestic and foreign firms and the related competitive dynamics between them in (and eventually out of) transition economies. While previous research tends to focus on MNEs or domestic firms within transition economies, ours is one of the first efforts that systematically model the competitive interaction between them with a longitudinal perspective. [ABSTRACT FROM AUTHOR]

This study draws upon the strategic management control literature, goal-setting, and expectancy theory to address the management of quality in Chinese manufacturing operations. Operating in a transition economy, Chinese managers face specific challenges in adapting management strategies and control systems. Using causal modeling, we examine the implementation of quality strategies through management control and reward systems in 38 manufacturing firms operating in the Pearl River Delta, examining the effects of company size. The results indicate that for larger firms, significant linkages were found between reward systems based on quality outcomes and quality feedback, and in turn, quality feedback was significantly linked to both quality goals and a strategic focus on quality. However, for smaller firms, while significant relationships exist between reward systems based on quality outcomes and the provision of quality goals and feedback, no significant linkages were found between the implementation of management control systems and a strategic focus on quality. This study emphasizes the need to develop more robust theories to address the manufacturing environments of transition economies such as China, as well as the need for additional field research on indigenous firms in Asia. [ABSTRACT FROM AUTHOR]

Why do private firms grow vibrantly in transition economies despite their limited access to formal financing? This study underscores the importance of informal financing in facilitating the growth of private firms in China. Drawing from the institutional economics argument, we posit that informal financing, in the form of underground financing and trade credit, substitutes formal financing in providing financial assistance and capital to private firms in China. We further posit that the effects of two kinds of informal financing vary across provinces with different levels of institutional development, and complement each other by supporting firms in different industries. We test our arguments with a sample of 284 private firms in 19 cities in China. The results generally support the value-added effects of alternative financing and its coexistence with formal financing. Our study contributes to the literature by highlighting informal financing as a void-filling institution in the capital markets in China. [ABSTRACT FROM AUTHOR]

Within transition economies, a popular tactic for revitalizing large and inefficient stateowned enterprises (SOEs) is to privatize them. Unfortunately, the empirical evidence related to this issue is equivocal. This study, therefore, explores more deeply what the relationship may be between privatization efforts of SOEs and their financial performance in transition economies. Specifically, we seek to better understand whether privatization reforms per se, or other corporate governance mechanisms that complement or substitute for this effort, are most effective. Using a panel sample of Chinese state-owned public firms over an eight year period from 1999 to 2006, we find that managerial ownership has a more significant impact on firm performance than privatization does. This finding suggests that internal incentives to managers may be more effective than external market mechanisms in economies transitioning from centralized planning to market control. Our results are robust using a wide variety of performance measures and different model specifications. [ABSTRACT FROM AUTHOR]

This paper explores the dynamic relationship between politicians and entrepreneurs in the governance of business organizations in transition China. A longitudinal case study of Kelon (1984-2001), a product of politician-entrepreneur alliance in China's household appliance sector, reveals how certain political resources that once assisted the entrepreneurs in creating competitive advantages in transition economies may turn into political liabilities during the course of institutional transition. Drawing upon the resource-based view (RBV) of the firm, the rent appropriation literature, and the agency theory, this paper sheds light on the contingent impacts of political resources on corporate governance and firm performance in transition economies. [ABSTRACT FROM AUTHOR]

Using institutional and resource dependence theories as the conceptual framework, this study identifies three forms of conformity-political, economic, and social-that can affect the level of private entrepreneurs' formal political participation in a transition economy. Data from a 2004 national-wide survey of 3,012 private firms in China show that political conformity (indicated by membership in the ruling party), economic conformity (amount of taxes paid), and social conformity (amount of charity donated) are each antecedents to private entrepreneurs' formal political participation. Moreover, political conformity negatively moderates the relationship between social conformity and private entrepreneurs' formal political participation-for party members, a lesser amount of charity is associated with higher levels of political position as compared to non-party members. We also found that the rewards of formal political participation have institutional boundaries: political participation can indeed bring private entrepreneurs economic rewards such as a greater amount of loans from state banks but not from shareholding and underground banks. [ABSTRACT FROM AUTHOR]

This paper develops a framework to assess the influences of institutions and markets on the business strategy of firms in transition economies. We argue that regulatory systems and markets in transition economies are interdependent. Their changing conditions will interact and influence the types of partnerships in new market entry. Using a case study approach based on historical data and interviews, we show how China's telecommunications industry evolved between 1987 and 2007, and led to the development of a 3G (third generation mobile telecommunications) standard and networks. Our analysis based on the framework explains how regulative elements and market conditions shape the strategic choices of partnerships between domestic and foreign firms when entering China's 3G market. [ABSTRACT FROM AUTHOR]

This paper investigates how entrepreneurs in China accumulate and integrate information and knowledge to identify opportunities when facing weak infrastructure and changing institutional settings. By employing institutional theory and an interactive framework of entrepreneurship, this paper proposes a model that incorporates both individual and environmental effects. First the individual characteristics that lead to opportunity recognition are discussed: (1) human capital, (2) social capital, and (3) social skills. Next the model proposes that the relationships between individual characteristics and opportunity recognition are contingent upon: (1) the entrepreneurial environment in which opportunities are discovered, and (2) the personal turbulence experienced by entrepreneurs. [ABSTRACT FROM AUTHOR]

This paper reviews the organizational leadership literature in the post-Soviet countries of Central Asia and the Caucasus. More importantly, we issue a “Clarion Call” for leadership scholars to focus their attention on the region while also providing key considerations and directions for future leadership research in the region. To help encourage and guide future leadership research, the paper provides a comprehensive research framework that identifies factors that need to be incorporated in future research on leadership in the Central Asia and Caucasus countries. We conclude with a discussion of potential research challenges that can arise, as well as research opportunities that are available, as a result of the unique idiosyncrasies of the region known as Central Eurasia. [ABSTRACT FROM AUTHOR]

While it stands to reason that serial entrepreneurs—individuals who have founded more than one new venture—should achieve higher levels of success than novices, to date researchers have found little support for this proposition. Is this rather perplexing result only limited to the developed countries in which most research has been conducted? Or is it indicative of a general phenomenon, and hence requesting the need for new theory? We explore these questions by testing the existing theory in two geographic regions in a rapidly emerging transition economy—China. Data from 440 Chinese entrepreneurial ventures suggest that experienced entrepreneurs are better at developing networks, and at managing organizations than novices, but like their counterparts in developed countries, do not necessarily achieve higher levels of venture performance. Implications for theory, as well as for entrepreneurship in the context of transition economies are addressed. [ABSTRACT FROM AUTHOR]

The proliferation of transition economies provides a unique opportunity to study the formation and behavior of social and economic structures, and literature exploring these issues has grown dramatically in recent years. Sociologists have made important contributions to the study of transition, particularly to theories of organizations and organizational change in China. In this article, I provide a critical assessment of the state of sociological literature on the transition process. I take stock of research that studies the emergence of new organizational forms, the growth of entrepreneurship, and the development of markets in China. I conclude with suggestions for resolving central debates and otherwise extending the literature. [ABSTRACT FROM AUTHOR]

Extensive studies of the organizational slack–performance relationship offer mixed findings in developed economies while little research attends to transition economies. Replicating and extending earlier work by Tan and Peng (), this study examines the relationship between organizational slack and firm performance in China and focuses on the moderating effects of firm ownership and competitive intensity. Empirical findings based on longitudinal data from 60,945 firms during 1998–2002 suggest that the impact of organizational slack on performance is stronger for private enterprises than for SOEs and foreign-invested enterprises. Furthermore, industry competitive intensity positively moderates the effect of organizational slack on performance. In a three-way interaction effect, the moderating effect of competitive intensity on the organizational slack–performance relationship is weaker in SOEs than in private enterprises and foreign invested enterprises. [ABSTRACT FROM AUTHOR]

Many of the world’s firms have a familial dimension; including some of the most dynamic and emerging markets of East Asia. However, this important aspect of organizing economic activity remains understudied and misunderstood. A central theme of this article is that while families matter in economic activity throughout the world, they matter in different ways depending on the institutional context. To illustrate this theme a varieties of capitalism perspective is used to develop a rudimentary global comparative framework. Institutional context is portrayed as a key determinant of the degree and type of family governance that typify national economies. Implications for corporate governance and entrepreneurship in East Asia are discussed. [ABSTRACT FROM AUTHOR]

Using Vietnam as the context, the study empirically examines how the competitive advantage of international joint ventures (IJVs) in transition economies is affected by the acquisition of resources from foreign partners and of local market-based resources. Our study contributes to the nascent literature on IJVs in transition economies by producing several novel and interesting findings. First, it demonstrates the need to modify certain arguments of the resource-based view (RBV) when applied to IJVs in transition economies. This paper shows that the peculiar market characteristics of transition economies serve as an imitation barrier turning even property-based resources into sources of sustainable competitive advantage. Second, the positive impact of knowledge-based resources on the IJV’s competitiveness seems to be significantly enhanced as the ownership by the foreign parent increases. Lastly, competitive advantage of IJVs appears to be strengthened when the transfer of property-based resources is complemented by that of knowledge-based resources, and when the transfer of internal, firm-specific resources is complemented by that of external, market-based ones. We believe that these findings make significant, incremental theoretical and empirical contributions to both the RBV and IJV literatures. [ABSTRACT FROM AUTHOR]

In this paper, we provide an overview of the extant research on the development of entrepreneurship in China. This research focus is a relatively recent phenomenon since China’s market transition started from late 1978. We review the literature over the 26 years from 1980 through 2005, as published in 11 leading English-language academic journals. We identify 68 articles from this review and analyze them based on the research subjects, methods, and firm types. From this review, and integrating with research on market transitions, we propose a three-stage model of market transitions that has important implications for entrepreneurship research in transition economies. [ABSTRACT FROM AUTHOR]

This commentary on Klaus Meyer’s article, “Asian Management Research Needs More Self-confidence,” in the Asia Pacific Journal of Management (2006), discusses the need for Asian management research to look beyond the pressures for publication in top-tier, Western scholarly academic journals. We reflect on our nearly two decades of research on Russian management to illustrate many of Meyer’s ideas and insights in a different transition economy. We support his call for more context-specific research that can also offer contributions to global management knowledge as well as indigenous management practice. [ABSTRACT FROM AUTHOR]

As institutional transitions in emerging economies intensify, the basis for competition is theorised to move from relationship-based to market-based. An in-depth analysis of the strategy of the Salim Group, one of the largest ethnic Chinese conglomerates in the Asia-Pacific region, supports the view that the strategy of this conglomerate can be understood as moving between the extremes of crony capitalism (the relationship-based model) and the existing Western norms for multinational business (the market-based model). Both models are essential for its success, but the former, relationship-based model seems more important in early times and the latter, market-based model becomes more significant during recent institutional changes. We also find evidence that the strategic movement between those extremes takes the form of irregular oscillatory dynamics. [ABSTRACT FROM AUTHOR]

In a transition economy, how does business group affiliation make a difference in firm performance? Under the broad label of institutional voids, what specific voids can business groups fill? This paper addresses these questions by drawing on insights from property rights theory and an institutional perspective. We argue that ownership voids, as a subset of institutional voids, occur due to the lack of unambiguously specified ownership of state assets in transition economies, and that business groups emerge to serve as the direct owners of state-owned enterprises to replace such voids. Based on a sample of 1,119 publicly-listed Chinese companies, we find that the interaction of business group affiliation and state ownership has a significant and positive effect on firm performance. Our findings point to business group’s substitution role in filling ownership voids in China’s transition economy. [ABSTRACT FROM AUTHOR]

Private firms in transition economies are operating in an extremely uncertain environment, with underdeveloped market institutions, poorly defined property rights, and absence of reliable business data. This raises a very basic question of how owners of these firms persuade bankers to make much needed loans. This study employs an institutional perspective and argues that firms' legitimacy positively influences their accessibility to bank financing. Specifically, this study develops a model that links networking, professional management practices, and growth stage with bank financing and tests that model using a sample of Vietnamese private firms. The results support the hypotheses that growth stage and networking greatly influence firms' accessibility to bank financing, and that the impact of networking on financing is contingent on the growth stage. [ABSTRACT FROM AUTHOR]

With the deepening of China's economic reform, SMEs are starting to gain tremendous economic momentum and play an increasingly irreplaceable role in China's century-long bid for economic resurgence. Using a micro-macro link approach, this study investigates the effects of managerial value of reciprocity on both social capital and firm performance in China's rural SMEs. A structural equation modelling method was used to test hypotheses. Data from 177 SMEs in China provide supporting evidence that there exists a micro-macro link from managerial value of reciprocity, to social capital (trust) and to firm performance (both overall performance and competitiveness improvement). [ABSTRACT FROM AUTHOR]

This article focuses on recent research that focuses on the context-specific nature of diversification and the impact of organizational ownership on the choice of diversification strategy. Organizational owners have been the focus of study for a lot of interrelated streams of research spanning financial economics, organizational theory, and strategic management. Much of this line of research has examined the influence that the owners of an organization exert in terms of monitoring firm performance or strategic actions initiated by management. In recent years, increasing attention has focused on the performance outcomes of diversification in emerging markets.