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Asian Business & Management

, Volume 17, Issue 1, pp 37–58 | Cite as

Political rotations and cross-province firm acquisitions in China

  • Yulia Muratova
  • Jakob Arnoldi
  • Xin ChenEmail author
  • Joachim Scholderer
Research Article

Abstract

The underdeveloped institutional framework and trade barriers between China’s provinces make cross-province acquisitions challenging. We explore how Chinese firms can mitigate this problem. Drawing on social network theory we propose that cross-province rotation of political leaders—a key element of the promotion system of political cadres in China—is a mechanism enabling growth through cross-province acquisitions. We conceptualize rotated leaders as brokers between two geographically dispersed networks. We contribute to the literature on the characteristics of Chinese social networks, the effect of political connections on firm strategy, and the impact of political rotations on firm growth in China’s provinces.

Keywords

China Acquisitions Political rotations Local government 

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Copyright information

© Macmillan Publishers Ltd., part of Springer Nature 2018

Authors and Affiliations

  • Yulia Muratova
    • 1
    • 2
  • Jakob Arnoldi
    • 1
    • 2
  • Xin Chen
    • 3
    • 4
    Email author
  • Joachim Scholderer
    • 5
    • 6
    • 7
  1. 1.Department of Management, School of Business and Social SciencesAarhus UniversityAarhusDenmark
  2. 2.Sino-Danish Centre for Education and Research (SDC)AarhusDenmark
  3. 3.Shanghai Advanced Institute of FinanceShanghai Jiao Tong UniversityShanghaiChina
  4. 4.School of EconomicsYunnan UniversityKunmingChina
  5. 5.School of Economics and BusinessNorwegian University of Life SciencesÅsNorway
  6. 6.Department of Economics and Business EconomicsAarhus UniversityAarhusDenmark
  7. 7.Department of InformaticsUniversity of ZurichZurichSwitzerland

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