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Political connection and disconnection : Still a success factor for Chinese Entrepreneurs

Burt, Ronald S. and Opper, Sonja LU (2020) In Entrepreneurship Theory and Practice
Abstract
Political connection in China is often tested for correlation with business success and government support under a suspicion that connected entrepreneurs enjoy special favors and protection. Research evidence is mixed. In revisiting the debate on political capital in China, we apply a socially embedded perspective on political connection. To this end we introduce two methodological innovations: (a) We develop a broader measure of political connectedness that covers the continuum from political connection to disconnection. (b) We integrate data on political connection with social network data. Specifically, we explore how the social structure around the individual entrepreneur affects performance above and beyond the often tested... (More)
Political connection in China is often tested for correlation with business success and government support under a suspicion that connected entrepreneurs enjoy special favors and protection. Research evidence is mixed. In revisiting the debate on political capital in China, we apply a socially embedded perspective on political connection. To this end we introduce two methodological innovations: (a) We develop a broader measure of political connectedness that covers the continuum from political connection to disconnection. (b) We integrate data on political connection with social network data. Specifically, we explore how the social structure around the individual entrepreneur affects performance above and beyond the often tested association between political ties and performance. We draw two conclusions: (1) The success association with political connection is discontinuous. Advantage is less for entrepreneurs weakly connected politically, but significant additional disadvantage arises for the politically disconnected. (2) The additional is that entrepreneurs disconnected from government show no benefit from having an advantaged business network. The politically connected with an advantaged business network show more prosperous business, higher returns on assets, and more likely survival over time. The politically disconnected show none of these benefits. We caution the entrepreneur who plans to ignore the government. (Less)
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author
and
organization
publishing date
type
Contribution to journal
publication status
epub
subject
keywords
networks, social capital, specialty areas, political, China
in
Entrepreneurship Theory and Practice
pages
30 pages
publisher
Wiley-Blackwell
external identifiers
  • scopus:85077590430
ISSN
1042-2587
DOI
10.1177/1042258719893110
language
English
LU publication?
yes
id
08c74ae8-175d-43f0-a831-0c1f9e366e07
date added to LUP
2020-01-10 18:26:40
date last changed
2020-02-02 07:08:07
@article{08c74ae8-175d-43f0-a831-0c1f9e366e07,
  abstract     = {Political connection in China is often tested for correlation with business success and government support under a suspicion that connected entrepreneurs enjoy special favors and protection. Research evidence is mixed. In revisiting the debate on political capital in China, we apply a socially embedded perspective on political connection. To this end we introduce two methodological innovations: (a) We develop a broader measure of political connectedness that covers the continuum from political connection to disconnection. (b) We integrate data on political connection with social network data. Specifically, we explore how the social structure around the individual entrepreneur affects performance above and beyond the often tested association between political ties and performance. We draw two conclusions: (1) The success association with political connection is discontinuous. Advantage is less for entrepreneurs weakly connected politically, but significant additional disadvantage arises for the politically disconnected. (2) The additional is that entrepreneurs disconnected from government show no benefit from having an advantaged business network. The politically connected with an advantaged business network show more prosperous business, higher returns on assets, and more likely survival over time. The politically disconnected show none of these benefits. We caution the entrepreneur who plans to ignore the government.},
  author       = {Burt, Ronald S. and Opper, Sonja},
  issn         = {1042-2587},
  language     = {eng},
  month        = {01},
  publisher    = {Wiley-Blackwell},
  series       = {Entrepreneurship Theory and Practice},
  title        = {Political connection and disconnection : Still a success factor for Chinese Entrepreneurs},
  url          = {http://dx.doi.org/10.1177/1042258719893110},
  doi          = {10.1177/1042258719893110},
  year         = {2020},
}