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

• DOI: 10.1007/s10490-016-9473-0
• Publication Date: 2016-06-20T07:53:11Z
• Authors: En Xie; Yuanyuan Huang; Hao Shen; Yu Li
• Keywords: Strong ties; Affect; Survey data collection; State owned; State ownership; Family ties

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.