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Political tie heterogeneity and the impact of adverse shocks on firm value
File(s)
Sun et al 2015 JMS.pdf (662.42 KB)
Published version
Author(s)
Sun, P
Mellahi, K
Wright, M
Xu, H
Type
Journal Article
Abstract
Past research has recognized the contingent value of corporate political ties but largely neglects their heterogeneity. Drawing on the political embeddedness perspective and literature on emerging economy political institutions, we develop hypotheses regarding how political networks comprising managerial and government ownership ties may have different valuation effects in the face of adverse political shocks. Examining stock market responses to an unanticipated, high-profile political event in China, we find a negative valuation effect of managerial ties to municipal government, but an insignificant effect of government ownership ties. Further, companies combining managerial and ownership ties experienced less post-shock reduction in market value than those holding only managerial political ties. These findings shed light on the values of different configurations of corporate political ties and inform firms of potential ways to manage ubiquitous political hazards in emerging economies.
Date Issued
2015-11-03
Date Acceptance
2015-09-04
Citation
Journal of Management Studies, 2015, 52 (8), pp.1036-1063
URI
URL
DOI
ISSN
1467-6486
Publisher
Wiley: 24 months
Start Page
1036
End Page
1063
Journal / Book Title
Journal of Management Studies
Volume
52
Issue
8
Copyright Statement
© 2015 John Wiley & Sons Ltd and Society for the Advancement of Management Studies. This is the accepted version of the following article, which has been published in final form at http://onlinelibrary.wiley.com/doi/10.1111/joms.12165/abstract
Identifier
http://gateway.webofknowledge.com/gateway/Gateway.cgi?GWVersion=2&SrcApp=PARTNER_APP&SrcAuth=LinksAMR&KeyUT=WOS:000364318100002&DestLinkType=FullRecord&DestApp=ALL_WOS&UsrCustomerID=1ba7043ffcc86c417c072aa74d649202
Subjects
Social Sciences
Business
Management
Business & Economics
China
emerging economies
network embeddedness
political risk
political tie
tie heterogeneity
EMERGING ECONOMIES
MANAGEMENT RESEARCH
STATE OWNERSHIP
SOCIAL NETWORKS
PERFORMANCE
STRATEGY
EMBEDDEDNESS
CONNECTIONS
TRANSITION
GOVERNMENT
1503 Business and Management
1505 Marketing
Business & Management
Publication Status
Published
Date Publish Online
2015-09-04