Research On The Influence Of Political Connections On Private Real Estate Companies’ Re-entrepreneurial Performance

With the continuous deepening of China’s economic transition and the fundamental change in the supply-demand relationship in the real estate industry,the traditional pattern of"land development+property sales" of real estate companies is increasingly difficult to continue,which makes it a realistic choice for them to carry out re-entrepreneurship,especially for private real estate companies.Private real estate companies must be capable of acquiring and utilizing critical entrepreneurial resources as well as favorable internal and external environmental conditions if they want to carry out re-entrepreneurship successfully.However,the economic operation in a transition economy like China is mainly in the control of the government,which can influence and intervene the re-entrepreneurial activities of private real estate companies by such means as policy support and resource allocation,as a rational response to which private real estate companies tend to establish effective political connections by participating in political affairs or employing former government officials as senior executives with the purpose of evading unfavorable influence of the external environment and gaining the government’s support in policy and resources as well.In contrast to the fact that re-entrepreneurship is springing up,research into the relationship between political connections and re-entrepreneurial performance,particularly the one between political connections and the re-entrepreneurial performance of private real estate companies,is still in its early stage,and there is even less theoretical literature about the influence of political connections on the re-entrepreneurial performance of private real estate companies in the background of China’s transition economy.Under such circumstances,exploring the influence mechanism of political connections on private real estate companies’re-entrepreneurial performance and the possible constraints or interference involved is not only a critical problem to be interpreted theoretically but helps private real estate companies make reasonable political strategies and provides beneficial implications for the promotion of their re-entrepreneurial performance.Given the above,the study focuses on the re-entrepreneurial practice of private real estate companies in China and is conducted on the basis of the survey data from certain private real estate companies by using the methods of theoretical research,exploratory case study and empirical study.Focusing on the basic problem of how political connections impact the re-entrepreneurial performance of private real estate companies,the study explores respectively the action mechanism of political connections on the re-entrepreneurial process of private real estate companies and their influence mechanism on private real estate companies’re-entrepreneurial performance as well as the influence of the internal and external environment.The main conclusions are as follows.(1)Political connections have positive effects on each stage of private real estate companies’ re-entrepreneurial process,mainly on the acquisition of entrepreneurial resources.Through an exploratory case study of three private companies in the real estate industry or the relevant industry,it is found that the influence of political connections,which contribute to the acquisition of entrepreneurial resources,is throughout the whole re-entrepreneurial.process of private real estate companies.The resource bundles acquired help private real estate companies put entrepreneurial opportunities into actual practice and thereby promote their re-entrepreneurial process.The case study also suggests that different forms of political connections might have different effects on the re-entrepreneurial process of private real estate companies,which calls for attention of further research.(2)Different forms of political connections,political connections of NPC members and CPPCC members and political connections of former government officials,both have positive impact on private real estate companies’ re-entrepreneurial performance except that political connections of NPC members and CPPCC members exert a greater influence than political connections of former government officials,with entrepreneurial resource acquisition playing the role of partial mediation.Through the empirical analysis of data from private real estate companies,the study finds that ①the two different forms of political connections both have positive impact on the re-entrepreneurial performance of private real estate companies,but the influence of political connections of NPC members and CPPCC members is greater than that of former government officials,which might be caused by the different formation reasons of the different forms of political connections and the different time periods when they exert influence;②political connections have positive impact on the re-entrepreneurial performance of private real estate companies and part of the impact is exerted through entrepreneurial resource acquisition as the mediating variable,which is a key factor that affects the level of re-entrepreneurial performance.(3)As the external environmental factor,the institutional environment influences the re-entrepreneurial performance of private real estate companies by way of negatively regulating the relationship between political connections and private real estate companies’entrepreneurial resource acquisition.The empirical research of private real estate companies shows that the influence of political connections on private real estate companies’entrepreneurial resource acquisition weakens and the influence on their re-entrepreneurial performance is also weak as a result if the institutional environment is stable and sound;on the contrary,if the institutional environment is not stable or sound,the influence of political connections on private real estate companies’ entrepreneurial resource acquisition strengthens,which helps with the promotion of their re-entrepreneurial performance.However,the moderating effect of the institutional environment on the relationship between political connections of former government officials and knowledge resource acquisition is not prominent,the reason of which might be that political connections of former government officials and knowledge resources are both implicit so that the institutional environment hardly has a significant influence on the relationship between them.On the whole,whether the institutional environment is healthy or not,it determines the extent to which political connections play the role of non-market mechanism and also determines the results of private real estate companies’ re-entrepreneurship to some degree.(4)As the internal environmental factor,political skill influences the re-entrepreneurial performance of private real estate companies by way of positively regulating the relationship between political connections and private real estate companies’ entrepreneurial resource acquisition.The study finds that political skill plays a significant role in the establishment of government-enterprise relationship by means of political connections.Managers with a high level of political skill can facilitate the steady development of government-enterprise relationship and adjust and strengthen the close connections between the government and the enterprise as well as those between managers and government officials,which is significant for private real estate companies to acquire critical entrepreneurial resources through political connections.The empirical analysis of private real estate companies suggests that political skill positively regulates the relationship between different forms of political connections and entrepreneurial resource acquisition.In other words,the more politically skilled managers are,the greater impact of political connections on the entrepreneurial resource acquisition of private real estate companies and the better re-entrepreneurial performance;the less politically skilled managers are,the weaker impact of political connections on the entrepreneurial resource acquisition and re-entrepreneurial performance of private real estate companies.