Competitive position, managerial ties, and profitability of foreign firms in China: an interactive perspective

• 成果类型: Article
• 署名作者: Li, Julie Juan; Zhou, Kevin Zheng; Shao, Alan T.
• 署名单位: City University of Hong Kong; University of North Carolina; University of North Carolina Charlotte
• 刊物名称: JOURNAL OF INTERNATIONAL BUSINESS STUDIES
• ISSN/ISSBN: 0047-2506
• DOI: 10.1057/jibs.2008.76
• 发表日期: 2009
• 页码: 339-352
• 关键词: competitive strategy perspective; social network theory; STRATEGIC CHOICE; MANAGERIAL TIES; Emerging economy; CHINA

摘要

Despite the prominence of the competitive strategy perspective, it remains unclear whether foreign firms entering China can still adopt a differentiation or low-cost position to achieve superior performance, given the unique market and institutional environments in China. Alternatively, should foreign firms follow conventional wisdom and actively build managerial ties with government officials and business community to enhance their performance? This study develops and tests an interactive perspective that highlights the moderating effects of managerial ties on competitive position-performance relationships. The results indicate that though both differentiation and low-cost positions foster foreign firm profitability, the benefit of a differentiation position is conditional on political and business ties in different directions: political ties impede and business ties strengthen the positive effect of a differentiation position on foreign firms' profitability. Moreover, foreign firms benefit from their use of business ties, but their profitability suffers when they rely increasingly on the heavy use of political ties.