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Political rotations and cross-province firm acquisitions in China


Muratova, Yulia; Arnoldi, Jakob; Chen, Xin; Scholderer, Joachim (2018). Political rotations and cross-province firm acquisitions in China. Asian Business & Management, 17(1):37-58.

Abstract

The underdeveloped institutional framework and trade barriers between China’s provinces make cross-province acquisitions challenging. We explore how Chinese firms can mitigate this problem. Drawing on social network theory we propose that cross-province rotation of political leaders—a key element of the promotion system of political cadres in China—is a mechanism enabling growth through cross-province acquisitions. We conceptualize rotated leaders as brokers between two geographically dispersed networks. We contribute to the literature on the characteristics of Chinese social networks, the effect of political connections on firm strategy, and the impact of political rotations on firm growth in China’s provinces.

Abstract

The underdeveloped institutional framework and trade barriers between China’s provinces make cross-province acquisitions challenging. We explore how Chinese firms can mitigate this problem. Drawing on social network theory we propose that cross-province rotation of political leaders—a key element of the promotion system of political cadres in China—is a mechanism enabling growth through cross-province acquisitions. We conceptualize rotated leaders as brokers between two geographically dispersed networks. We contribute to the literature on the characteristics of Chinese social networks, the effect of political connections on firm strategy, and the impact of political rotations on firm growth in China’s provinces.

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Additional indexing

Item Type:Journal Article, refereed, original work
Communities & Collections:03 Faculty of Economics > Department of Informatics
Dewey Decimal Classification:000 Computer science, knowledge & systems
Scopus Subject Areas:Social Sciences & Humanities > Business and International Management
Social Sciences & Humanities > Sociology and Political Science
Social Sciences & Humanities > Political Science and International Relations
Social Sciences & Humanities > Strategy and Management
Scope:Discipline-based scholarship (basic research)
Language:English
Date:2 February 2018
Deposited On:25 Nov 2020 11:29
Last Modified:23 Jun 2024 01:45
Publisher:Palgrave Macmillan
ISSN:1472-4782
OA Status:Green
Publisher DOI:https://doi.org/10.1057/s41291-018-0029-7
Related URLs:https://link.springer.com/article/10.1057/s41291-018-0029-7
Other Identification Number:merlin-id:20057
  • Content: Accepted Version