Political Connection and Firm Performance: Comparative Research Based on the Interpersonal and Interorganizational Level

Abstract

Abstract: As an important non-market strategy, political connection is crucial to firms' survival and development. However, the existing researches have not yet formed a unified conclusion of the relationship between political connections and firm performance. To address this question, drawing on the strategy tripod perspective, the research divides the political connections into interpersonal and interorganizational levels, and then explores the different impacts from two different levels of political connections on firm performance. The research also examines the moderating effect of industrial factor (competitive intensity) and institutional factor (dysfunctional competition) on the main effect. Results show that, compared to the interpersonal level of political connections, the interorganizational level has a stronger positive effect on firm performance. Also, the research examines the different moderating effect of environmental factors on the relationship between two level political connections and performance:interorganizational political connections are more beneficial when the competitive intensity is high and the dysfunctional competition is low, whereas interpersonal political connections bring greater performance when it is less competitive and the dysfunctional competition is high.

Key words: strategy tripod perspective, interorganizational political connection, interpersonal political connection, competitive intensity, dysfunctional competition

Wang Longwei, Wang Wenjun, Wang Li. Political Connection and Firm Performance: Comparative Research Based on the Interpersonal and Interorganizational Level[J]. Management Review, 2021, 33(3): 213-224.

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