The Research on Relationships between Political Connection and Corporate Performance in China: Top Management Team’s Human Capital as the Moderator
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DOI: 10.23977/icidel.2018.092
Corresponding Author
Jing Liu
ABSTRACT
This paper not only conducted effects of political connection on corporate performance, but also testified the moderate role of the depth and width of the TMT to the relationship between political connection and performance in the agricultural market, which is close to perfect competition. It is found that the interaction between TMT’s width and political connection positively moderated the relationship between chairman’s political connection and performance. But their interactions will decrease the company’s performance. Political connection played some effects in agriculture market under the background of China’s social culture and cognition, but it didn’t have significant influence on company’s performance. The government should regulate the political connection and increase the transparency of information. From the internal governance of enterprises, the corporation should keep regular communication with the government, and control the cost of political connection under the law.
KEYWORDS
Non market competition strategy, political connection, performance, human capital, top management team(TMT), depth of human capital, width of human capital