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Asia Pacific Journal of Management

, Volume 29, Issue 3, pp 799–818 | Cite as

Political connections and corporate diversification in emerging economies: Evidence from China

  • Weiwen Li
  • Ai HeEmail author
  • Hailin Lan
  • Daphne Yiu
Article

Abstract

Drawing upon the resource-based view, this study examines how political connections affect corporate diversification in an emerging economy. Data from a sample of 1,280 Chinese public firms over 2002–2005 show a strong positive relationship between political connections and corporate diversification. We also find that the positive relationship between political connections and corporate diversification is moderated by the level of state ownership in firms and the level of regional institutional development. Theoretical and managerial implications are discussed.

Keywords

Corporate diversification Resource-based view Political connections Emerging economy 

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Copyright information

© Springer Science+Business Media, LLC 2011

Authors and Affiliations

  1. 1.Department of Business AdministrationSun Yat-Sen Business SchoolGuangzhouChina
  2. 2.School of Economics and CommerceSouth China University of TechnologyGuangzhouChina
  3. 3.School of Business AdministrationSouth China University of TechnologyGuangzhouChina
  4. 4.Department of ManagementThe Chinese University of Hong KongHong KongHong Kong

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