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Conformity, political participation, and economic rewards: The case of Chinese private entrepreneurs

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Abstract

Using institutional and resource dependence theories as the conceptual framework, this study identifies three forms of conformity—political, economic, and social—that can affect the level of private entrepreneurs’ formal political participation in a transition economy. Data from a 2004 national-wide survey of 3,012 private firms in China show that political conformity (indicated by membership in the ruling party), economic conformity (amount of taxes paid), and social conformity (amount of charity donated) are each antecedents to private entrepreneurs’ formal political participation. Moreover, political conformity negatively moderates the relationship between social conformity and private entrepreneurs’ formal political participation—for party members, a lesser amount of charity is associated with higher levels of political position as compared to non-party members. We also found that the rewards of formal political participation have institutional boundaries: political participation can indeed bring private entrepreneurs economic rewards such as a greater amount of loans from state banks but not from shareholding and underground banks.

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Notes

  1. The average sample firm size was 44, if only long-term employees were taken into account.

  2. We measured taxes and charities as total RMB amounts but not as percentages of firm sales for three reasons. (1) It has been suggested by previous research that political actors in China are more likely to pay attention to these variations in total RMB amounts, as opposed to variations in proportionate amounts (Tao, 2004). (2) Initial analysis suggested the model, as pertains to Taxes and Donations, was non-linear.We therefore transformed these variables given the underlying assumptions for regression (normality) and the apparent non-linear relationship between these variables and the dependent variables of interest. (3) These measures are also consistent with the measures used in the previous studies which used survey samples from previous years, e.g., Ma and Parish (2006) and Li et al. (2006).

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Authors and Affiliations

  1. Owen Graduate School of Management, Vanderbilt University, 401 21st Ave. South, Nashville, TN, 37203, USA

    Ying Chen

  2. Washington and Lee University, Lexington, VA, USA

    David Touve

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  1. Ying Chen
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Chen, Y., Touve, D. Conformity, political participation, and economic rewards: The case of Chinese private entrepreneurs. Asia Pac J Manag 28, 529–553 (2011). https://doi.org/10.1007/s10490-009-9171-2

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