Nan Zhang, Qiao-zhuan Liang, Haimin Lei and Xiao Wang
Despite most studies on political ties focusing on the interpersonal relationships between firms and government officials, this study suggests that local party committees (LPCs…
Abstract
Purpose
Despite most studies on political ties focusing on the interpersonal relationships between firms and government officials, this study suggests that local party committees (LPCs) create special forms of political ties in China – i.e. organizational political ties. The purpose of this paper is to examine the influences that these organizational political ties have on Chinese firms’ innovative activities.
Design/methodology/approach
Drawing upon data based on a nationwide survey of Chinese firms in 2013, this study uses a structural equations model to examine the relationship between LPCs and firms’ innovations.
Findings
This study found that LPCs do affect firms’ innovations positively, including both radical innovations and incremental innovations.
Research limitations/implications
By suggesting that LPCs are a form of political tie particular to China – i.e. an organizational political tie – this study’s findings may shed fresh light on the research into political ties in other emerging economies.
Originality/value
Compared to traditional political ties, maintaining the organizational political ties fostered by LPCs benefits firms’ innovations significantly in China, making them less costly and more stable.