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Managerial ties and firm performance in an emerging economy: Tests of the mediating and moderating effects

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Abstract

Although the literature documents the direct effects of managerial ties on firm performance, the empirical results are divergent and inconclusive. To explain these disparities, this study (1) develops and tests a model that establishes the role of external resource acquisition as a salient mediating mechanism through which managers’ business and political ties influence firm performance; and (2) examines the moderating role of environmental turbulence that further explains the impact of managerial ties on resource acquisition (the mediator). Results from a survey of 253 firms in China indicate that resource acquisition plays a partial mediating role in the relationships between the two sub-dimensions of managerial ties and firm performance. Environmental turbulence shows a curvilinear (i.e., inverted U-shaped) moderating effect on the business ties–resource acquisition relationship, whereas it dampens the positive effect of political ties on resource acquisition. Theoretical and managerial implications are discussed.

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Notes

  1. Ray, Barney, and Muhanna (2004) suggested that in analyzing complex organizational relationships, studies should adopt the variables closely related with independent variables as dependent variables, rather than distant performance. We follow this suggestion and examine the moderation on the relationship between managerial ties and the mediator, resource acquisition.

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Authors and Affiliations

  1. School of Management, Xi’an Jiaotong University, No. 28 Xianning West Road, Xi’an, 710049, China

    Gang Wang, Xu Jiang, Chang-Hong Yuan & Ya-Qun Yi

  2. The Key Lab of the Ministry of Education for Process Control & Efficiency Engineering, Xi’an Jiaotong University, No. 28 Xianning West Road, Xi’an, 710049, China

    Xu Jiang

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  1. Gang Wang
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  2. Xu Jiang
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  3. Chang-Hong Yuan
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  4. Ya-Qun Yi
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Correspondence to Xu Jiang.

Additional information

We would like to thank Yadong Luo, Garry Bruton, and Carl Fey for helpful discussions. We also thank Simon S.K. Lam (senior editor) and two anonymous reviewers for constructive comments. Financial support by the National Natural Science Foundation of China (no. 70902067; no. 70972103) is gratefully acknowledged.

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Wang, G., Jiang, X., Yuan, CH. et al. Managerial ties and firm performance in an emerging economy: Tests of the mediating and moderating effects. Asia Pac J Manag 30, 537–559 (2013). https://doi.org/10.1007/s10490-011-9254-8

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