Author(s)

Pan Zhang

Corresponding Author

Pan Zhang

ABSTRACT

Using the data of China’s manufacturing industry listed firms, this paper empirically explores the intermediary effect of political relevance between institutional environment and innovation quality. The results show that mediation effect of political connection on the “institutional dividend effects” is nonlinear. For details, in the relatively poor institutional environment, the political connection can strengthen the “institutional dividend effects”, while weaken it in the relatively developed institutional environment, which means the firms’ strategy of political connection is not long-term sustainable. Our findings can provide some evidences for the government’s policy design and firms’ strategy formulation.

KEYWORDS

Political Relevance, Institutional Environment, Innovation Quality, Intermediary Effect