Can One Stone Kill Two Birds? Political Relationship Building and Partner Acquisition in New Ventures

Xiaowei Rose Luo, Ling Yang and Xiaobin He

Entrepreneurship Theory and Practice, 2020, vol. 44, issue 4, 817-841

Abstract: We extend the resource dependence theory to argue for the opposing effects of political relationship building on new ventures’ abilities to obtain suppliers and buyers. By signaling endorsement and better access to resources, political connection enhances new ventures’ legitimacy and bargaining position. In supply chains featuring high contractual uncertainties, suppliers favor new ventures with higher certainty of payment but buyers can be deterred by new ventures more difficult to control. Hence, paradoxically, political relationship building can exert opposing effects on a new venture’s acquisition of suppliers and buyers. We found empirical support through a survey of 337 new ventures in China.

Keywords: entrepreneurship; new ventures; corporate political activities; China (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:sae:entthe:v:44:y:2020:i:4:p:817-841

DOI: 10.1177/1042258719855965

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