Performance implications of nonmarket strategy in China

• DOI: 10.1007/s10490-006-9030-3
• Publication Date: 2007-01-18T14:52:45Z
• Authors: Yuanqiong He; Zhilong Tian; Yun Chen
• Keywords: Nonmarket forces

Nonmarket strategy may have positive influences on a firm’s performance. How does nonmarket strategy influence a firm’s performance? This article addresses this important question by introducing two mediators: corporate social performance and adaptive capability. The empirical results based on a survey of 438 usable questionnaires from China indicate that “buffering” and “bridging,” being two kinds of nonmarket strategies, have a positive impact on a firm’s economic performance through enhancing its social performance and adaptive capability. The article not only documents the positive effect of nonmarket strategy on firm performance in emerging economies such as China, but also explains the indirect relationship between nonmarket strategy and economic performance, which generates both theoretical and practical implications.