Corporate political analysis, state ownership of enterprises and firm performance in China

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Copyright © 2020 Inderscience Enterprises Ltd. This paper investigates the impact of corporate political analysis (CPA) on firm performance among Chinese firms, distinguishing between privately-owned firms (non-SOEs) and state-owned enterprises (SOEs). Uncertainty about the competitive environment was a key driver of CPA among non-SOEs firms, but not among SOEs. Differentiation was a significant performance driver for non-SOEs, but not SOEs. However, CPA had significant, negative performance implications for SOEs. Overall, the results of the multi-group analysis suggest two prominent “paths” to performance. Non-SOEs in the study perceived more considerable environmental uncertainty and pursued differentiation, whereas SOEs emphasised CPA. Implications for Chinese managers and future research are addressed.

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