Font Size: a A A

The Mechanism About Impacts Of Firm Top Managers’ Political Connections On Technological Innovation

Posted on:2015-05-05Degree:DoctorType:Dissertation
Country:ChinaCandidate:M X LuoFull Text:PDF
GTID:1109330482955803Subject:Business management
Abstract/Summary:PDF Full Text Request
The phenomenon of firm political connections is very common worldwide. Particularly, firm top managers’ political connections are most salient in China’s transition economy. The effect of political connections on focal firm has become the focus among firm executives, scholars and government officials. Especially, the effect of political connections on firm performance has attracted a lot of attention from scholars worldwide. However, prior empirical studies on the connections performance link are still inconclusive. Although there are some positive effects, the negative effects of the connections have not been disclosed, so as to the advantages and disadvantages have not been weighed clearly. Meanwhile, the extant literature mostly focuses on the effect of political connections on organizational performance such as economic performance and operational performance but not innovation performance. Actually, the effect of political connections on technological innovation performance is more important yet relatively unexplored topic, because innovation is a key factor determining a firm’s ability to sustain its competitive advantages. Therefore, the important question is:How can political connections influence firm technological innovation in transition economy? And also, the influence comes into effect by what way. However, there is inadequate research and the extant studies are inconclusive. This surely leaves some space for the further investigation.Grounded in the integration of upper echelons theory (UET), social capital theory (SCT) and resource-based view (RBV), this article aims to analyze the mechanism of political connections on technological innovation and makes four important theoretical contributions to the literature. First of all, through the integration and elaboration, the study develops a comprehensive framework, namely, political connections-innovation resource acquisition-innovation resource input innovation performance. Secondly, this research is helpful for understanding about mechanism of political connections on innovation resource input via the theoretical integration of the upper echelons theory and social capital theory. In accordance with social capital theory, political connections as outside social capital can only provide the possibilities and opportunities to approach external innovation resources, but it can’t explain how the connection influence the innovation resource input. Therefore, the integration of the UET and the SCT can draw a more comprehensive picture of how firms can hire resources to develop innovations. The mechanism is political connections-innovation resource acquisition-innovation resource input. Thirdly, the study also clarifies the internal mechanism between political connection and firm technological innovation performance by the integration of the upper echelons theory and resource-based view. The extant literature has the debate about the relationship between political connection and innovation performance. Meanwhile, it fails to cast light on the mechanism behind. Based on the integration of UET and RBV, this study carries on a deeply and systematically analysis and proposes the mechanism, that is political connections-innovation resource input-innovation performance. Last but not least, the study has deepened our knowledge of the mechanism of political connections on technological innovation through observation of moderating role of the market-based institutions and organizational slack. According to the former framework, the study focuses on the two situational effects, the firs is the moderating role of market-based institutions between the link of political connections-innovation resource acquisition, and the second is the moderating role of organizational slack between the links of political connections-innovation resource input.Based on the literature review and logical deduction, the study analyzes the mechanism of political connections on technological innovation by the use of empirical method. The research topic can be divided into three relatively independent and mutual questions, namely, whether political connections are helpful to scarce innovation resource acquisition, how can political connections influence innovation resource input, and how can political connections influence innovation performance. In accordance with theoretical framework and hypothesis, the thesis carries out careful study design. Therefore, the listed firms in Chinese entrepreneurial stock market during 2009~2011 periods are collected as the sample to test the hypothesis through statistical analysis. At last, the thesis reaches the empirical results by means of regression analysis and robustness test.The new findings of this research deepen our understanding about mechanism of political connections on technological innovation. The results indicate that political connections are helpful to scarce innovation resource acquisitions such as government R&D subsidies and bank debt financing. Moreover, the more market-based institutions, the more debt financing that firm can acquire. Although government R&D subsidies promote innovation resource input, the reverse is also true for debt financing. Consequently, political connections are not helpful to innovation resource input. This suggests that political connections have significant negative correlation with R&D investment intensity through the full mediating role of debt financing. In addition, the more organizational slack, the more negative effect of political connections on innovation resource input. And also, the results indicate that political connections have negative effect on firm technological innovation performance through the full mediating role of R&D investment. In summary, the effect of political connections on technological innovation shows the double-edged sword effect. Although political connections are beneficial to innovation resource acquisitions, connections are not conducive to innovation resource input and innovation performance at last. The results of this study also have practical implications for corporate executives and government officials.
Keywords/Search Tags:political connections, technological innovation, R&D investment, innovation performance, upper echelons theory
PDF Full Text Request
Related items