Raising Rivals’ Costs Through Political Strategy: An Extension of Resource‐based Theory

McWilliams, Abagail; Fleet, David D. Van; Cory, Kenneth D.

doi:10.1111/1467-6486.00308

Cited by 279 publications

(201 citation statements)

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“…Therefore, existing political connections might serve as channel and bridge through which firms build further linkages by making donations, strengthening their competitive advantage as well as hindering their rivals in the industry (Delmas et al 2016, McWilliams et al 2002. In contrast, highly competitive industries are more open to market competition and less controlled by the government.…”

Section: Resource Dependence and Effects Of Political Connectionsmentioning

confidence: 99%

“…But the relationship between the two is less clear (Delmas et al 2016, Mellahi et al 2016, Sun et al 2012. Some studies suggest that the two activities complement each other, e.g., CSR facilitates corporate political access (McWilliams et al 2002, Werner 2015. Others suggest that given that both CSR and CPA are not cost-free, the two nonmarket strategies can also serve as substitutes (Wang and Qian 2011); that is, if firms consider one strategy to be effective in achieving/protecting their interests, why would they bother to spend more resources on the other?…”

Section: Institutional Contingency Of Political Connectionsmentioning

confidence: 99%

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Do Political Connections Buffer Firms from or Bind Firms to the Government? A Study of Corporate Charitable Donations of Chinese Firms

Zhang

Marquis

Qiao

2016

Organization Science

318

348

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D o political connections buffer firms from or bind firms to the government? To examine this theoretical puzzle, we distinguish two types of managerial political connections, ascribed and achieved, and theorize that these different types of ties either buffer firms from or bind firms to government demands. Furthermore, we propose that these effects are contingent on both industrial and regional institutional conditions. We test our framework with a unique panel data set of privately controlled listed firms' charitable donations in China from 2001 to 2012. We find that firms whose executives have ascribed bureaucratic connections are more likely to use their connections as a buffer from governmental donation pressure, particularly in competitive industries and less market-oriented regions, whereas in state-monopolized industries this buffering effect is reduced. In contrast, achieved political connections are more likely to serve a binding function that facilitates donation, particularly in state-monopolized industries and more market-oriented regions, but in less marketoriented regions, they buffer firms from the pressure to donate. Our research contributes to the literatures on the effects of political connections, the institutional contingencies of political connections, and the relationship between corporate social responsibility (CSR) and corporate political activities (CPA).Keywords: political connections; corporate charitable donation; resource dependence; institutional environment History: Published online in Articles in Advance September 29, 2016. IntroductionAs institutional linkages that span firms and governmental authorities, firms' political connections are a key component of corporate political strategy in both developed and emerging economies (Hillman 2005, Hillman et al. 1999, Peng and Luo 2000. However, the effects of political connections on firm behavior and outcomes are not clear (Sun et al. 2012). Many studies focus on the benefits from such linkages and indicate that political connections have a "buffering" effect; that is, they provide a buffer for the organization from competitive and regulatory forces via access to information, influence, and legitimacy (Hillman 2005, Hillman et al. 1999, Lester et al. 2008, Peng and Luo 2000. Research has shown that firms can employ their political capital to shield themselves from unwanted political interference, unfavorable regulations, and/or various forms of government rent expropriation (Mellahi et al. 2016). Even in the United States, political connections have been shown to help firms when they deal with regulators (Correia 2014, Yu andYu 2011). In emerging markets, such a buffering effect is seen as an effective mechanism to protect firms from government rent-seeking behavior (Chen et al. 2011, Dieleman andBoddewyn 2012).In contrast, other studies consider these connections from the perspective of the government and emphasize the necessary costs of such linkages for the firm. From this perspective, political connections have a "binding" effect, ...

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Section: Resource Dependence and Effects Of Political Connectionsmentioning

confidence: 99%

Section: Institutional Contingency Of Political Connectionsmentioning

confidence: 99%

Do Political Connections Buffer Firms from or Bind Firms to the Government? A Study of Corporate Charitable Donations of Chinese Firms

Zhang

Marquis

Qiao

2016

Organization Science

318

348

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“…Firm/SBU Capron and Chatain, 2008McWilliams et al, 2002Oliver and Holzinger, 2008 Firm-level approaches to configuring, combing, and deploying political resources enable them to adapt to, anticipate, and even shape changes in the corporate political and social environment.…”

Section: Resource and Capabilities Perspectivementioning

confidence: 99%

Advancing Nonmarket Strategy Research: Institutional Perspectives in a Changing World

Doh

Lawton

Rajwani

2012

AMP

319

295

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“…Indeed, corporate political activities can encourage higher social, environmental and governance standards. For instance, it has been shown that lobbying by firms can help towards more stringent environmental regulations (McWilliams, Van Fleet, and Cory 2002).…”

Section: Table 5 About Herementioning

confidence: 99%

Corporate Social Responsibility and Societal Governance: Lessons from Transparency in the Oil and Gas Sector

Frynas

2010

J Bus Ethics

111

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Copyright and moral rights to this thesis/research project are retained by the author and/or other copyright owners. The work is supplied on the understanding that any use for commercial gain is strictly forbidden. A copy may be downloaded for personal, non-commercial, research or study without prior permission and without charge. Any use of the thesis/research project for private study or research must be properly acknowledged with reference to the work's full bibliographic details.This thesis/research project may not be reproduced in any format or medium, or extensive quotations taken from it, or its content changed in any way, without first obtaining permission in writing from the copyright holder(s).If you believe that any material held in the repository infringes copyright law, please contact the Repository Team at Middlesex University via the following email address:eprints@mdx.ac.ukThe item will be removed from the repository while any claim is being investigated. Corporate Social Responsibility and Societal Governance: Lessons from Transparency in the Oil and Gas SectorProfessor Jędrzej George Frynas Middlesex University Business SchoolThe Burroughs London NW4 4BT United Kingdom AbstractThis article evaluates the potential of the current Corporate Social Responsibility (CSR) agenda for addressing issues related to societal governance. The investigation focuses on the experience of the oil and gas sector, which has been among the leading industry sectors in championing CSR. In particular, the article analyses the issue of revenue transparency, which has been the principal governance challenge addressed by multinational oil and gas companies. The article suggests that (1) tackling governance challenges is crucial to addressing the impact of corporate activities; (2) current CSR and policy initiatives are entirely insufficient in addressing governance challenges; and (3) corporate activities may be contributing to governance failures. To be cited as:Frynas, Jedrzej George

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Raising Rivals’ Costs Through Political Strategy: An Extension of Resource‐based Theory

Cited by 279 publications

References 0 publications

Do Political Connections Buffer Firms from or Bind Firms to the Government? A Study of Corporate Charitable Donations of Chinese Firms

Do Political Connections Buffer Firms from or Bind Firms to the Government? A Study of Corporate Charitable Donations of Chinese Firms

Advancing Nonmarket Strategy Research: Institutional Perspectives in a Changing World

Corporate Social Responsibility and Societal Governance: Lessons from Transparency in the Oil and Gas Sector

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