Political Instability And Corporate Political Behavior:Empirical Evidence From The Belt And Road Countries

The complex and subtle interaction between the government and enterprises has always been an important topic of research in management academia.Recently,despite the importance of countries along the “Belt and Road” in the global economic system,the problems brought about by their institutional construction,ma rket mechanism,and imperfect economic order have gradually emerged.In this context,enterprises tend to conduct political activities and use political behavior to create favorable conditions for development.For example,the relationship between government and enterprise can bring financing convenience,tax incentives and policy support to the development of enterprises.As a result,how the external uncertain and unstable political and economic environment shapes the political behavior of enterprises has become a practical problem by enterprises in the countries along the “Belt and Road”.Based on the resource dependence theory and the institutional-based view,this paper studies the path,mechanism and effect of the political instability of the countries along the “Belt and Road” affecting the corporate political behavior.Using the corporate micro-data(2002-2009)of 27 countries along the “Belt and Road” collected by the World Bank,a regression statistical model was established to empirically test the relationship between political instability and corporate political behavior.The study found that there is a significant inverted U-shaped relationship between the political instability of the country and the corporate political behavior,that is,a certai n degree of political instability stimulates the investment of corporate political behavior,while a higher degree of political instability will lead to restrain corporate political behavior.This relationship shows marked heterogeneity among firms with di fferent resources.Specifically,the inverted U-shaped relationship between political instability and corporate political behavior is more obvious for companies that enter the market and carry out innovative activities;while financing capacity has a negat ive moderating effect on the relationship between political instability and corporate political behavior.The above results not only improve the study of political instability on corporate political behavior,but also have important implications for a deep er understanding of the relationship between companies and governments in transition economies.