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Asia Pacific Journal of Management
Published in: Asia Pacific Journal of Management 1/2017

20-06-2016

Performance implications of ties to large-scale state-owned enterprises and banks in an emerging economy

Authors: En Xie, Yuanyuan Huang, Hao Shen, Yu Li

Published in: Asia Pacific Journal of Management | Issue 1/2017

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Abstract

This paper examines how ties to large-scale state-owned enterprises and ties to banks affect firm performance in emerging economies. The findings, obtained from survey data collected from 208 firms in the Chinese manufacturing industry, indicate that both categories of ties improve firm performance. The value of the two categories of ties changes in organizational contexts that vary in terms of the moderators of size, age, and firm strategy. Specifically, ties to banks improve the performance of younger firms significantly more than that of older firms, while ties to large-scale state-owned enterprises improve the performance of smaller firms significantly more than that of larger firms.
previous article Internationalization within networks: Exploring the relationship between inward and outward FDI in China’s auto components industry
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Appendix
Available only for authorised users
Footnotes
4
The National Bureau of Statistics of China put the criteria into effect in 2003.
 
5
This study adopts the view that Chinese firms use either a flexibility or an efficiency strategy. According Gupta, Smith, and Shalley (2006), whether firms can simultaneously achieve flexibility and efficiency depends on their resource profile. Firms need to possess sufficient resources to achieve ambidexterity of efficiency and flexibility. Despite rapid development in recent decades, Chinese firms generally do not possess adequate resources to implement complicated strategies. Furthermore, because both flexibility and efficiency strategies are related to how firms offer products to markets, simultaneous adopting the two strategies is more difficult (Gupta et al., 2006). Empirical results from Ebben and Johnson (2005) also show a negative effect of mixing efficiency and flexibility on small firms’ performance. Thus, it might be less likely for Chinese firms to adopt flexibility and efficiency strategies simultaneously.
 
6
Recent studies suggest the potential benefits of balancing efficiency and flexibility strategies (e.g., Eisenhardt et al., 2010). However, other research considers the strategies diametrically opposed, in that they create conflicting demands in terms of technologies, expertise, labor, control systems, and organizational structures (Fiegenbaum & Karnani, 1991; Filley & Aldag, 1980). Ebben and Johnson (2005) assert that firms that combine the two strategies underperform those that focus on one or the other.
 
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Metadata
Title
Performance implications of ties to large-scale state-owned enterprises and banks in an emerging economy
Authors
En Xie
Yuanyuan Huang
Hao Shen
Yu Li
Publication date
20-06-2016
Publisher
Springer US
Published in
Asia Pacific Journal of Management / Issue 1/2017
Print ISSN: 0217-4561
Electronic ISSN: 1572-9958
DOI
https://doi.org/10.1007/s10490-016-9473-0

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