The role of government affiliation in explaining firm innovativeness and profitability in emerging countries: Evidence from China

Chengqi Wang, Mario Kafouros, Jingtao Yi, Junjie Hong and Panagiotis Ganotakis

Journal of World Business, 2020, vol. 55, issue 3

Abstract: Drawing from institutional polycentrism, we advance understanding of how affiliation with different government levels influences innovativeness and profitability in emerging countries. Our framework suggests that as different government levels vary in their objectives and resources, they affect firm innovativeness vis-à-vis profitability in qualitatively different ways. The analysis of 18,430 Chinese firms shows that affiliation with higher-level governments enhances firms’ innovativeness, whereas affiliation with lower-level governments is effective for enhancing profitability. Our framework also clarifies how location-specific institutional substitution occurs, indicating that the usefulness of government affiliation for innovativeness depends on how effectively legal institutions protect intellectual property in each region.

Keywords: State capitalism; Government affiliation; Political ties; Innovation; Profitability; China; Emerging countries (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (28)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1090951618309325
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:worbus:v:55:y:2020:i:3:s1090951618309325

Ordering information: This journal article can be ordered from
http://www.elsevier.com/wps/find/journaldescription.cws_home/620401/bibliographic
http://www.elsevier. ... 620401/bibliographic

DOI: 10.1016/j.jwb.2019.101047

Access Statistics for this article

Journal of World Business is currently edited by David Collings and Jonathan Doh

More articles in Journal of World Business from Elsevier
Bibliographic data for series maintained by Catherine Liu ().