The effect of political turnover on firms’ strategic change in the emerging economies: The moderating role of political connections and financial resources

Seong-jin Choi, Huilong Liu, Jun Yin, Yunfei Qi and Jeoung Yul Lee

Journal of Business Research, 2021, vol. 137, issue C, 255-266

Abstract: Do external uncertainties hold back or accelerate firms’ strategic change? To examine this issue, we develop a theoretical framework on the relationship between policy uncertainty caused by political turnover and the level of a firm’s strategic change and also theorize how political connections and financial resources affect firms’ response in the form of strategic change to environmental uncertainty. We test our framework with 16,451 firm-year observations of listed firms in China from 2008 to 2015 and find that political turnover has a negative influence on the level of a firm’s strategic change. Moreover, this influence is mitigated by political connections and/or financial resources.

Keywords: Political turnover; Strategic change; Politicalconnections; Financial resources; China (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jbrese:v:137:y:2021:i:c:p:255-266

DOI: 10.1016/j.jbusres.2021.08.034

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