"Corporate Political Activity, Firm Internal Capability: The Mediating Role of Institutional Capital".

This study examines the mediating impact of institutional capital on the relationship between Corporate Political Activities (CPA) and firms' internal capabilities. Based on both the resource based view and institutional perspectives, a firm's relational CPA and participation CPA, as well as its two channels for acquiring institutional resources, the formal institutional capital and informal institutional capital are identified to influence the firm's capabilities. Using survey data from multi-informants in 303 Chinese firms, our results suggest that firms' institutional resource acquisition meditates the relationship between CPA and firms' internal capabilities. This study concludes that the effects of relational CPA on firms' internal capabilities would be partially mediated by firms' institutional capital (formal institutional capital and informal institutional capital) while such effects of participation CPA are fully mediated by firms' institutional capital (formal institutional capital and informal institutional capital). This study also discusses theoretical contributions, managerial implications, limitations and future research directions. [ABSTRACT FROM AUTHOR]