Resource Dependence, Uncertainty, and the Allocation of Corporate Political Activity across Multiple Jurisdictions

Sutton, Trey; Devine, Richard A.; Lamont, Bruce T.; Holmes, R. Michael

doi:10.5465/amj.2017.1258

Cited by 68 publications

(30 citation statements)

References 83 publications

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“…Corporate political activities (CPAs) are an important research area in corporate strategy (Hillman et al 2004;Lux et al 2011;Mellahi et al 2016;Sutton et al 2020;Werner 2017), in part because governments still control firms' scarce resources in most transitional countries (Peng and Luo 2000;Marquis and Qian 2014) regarding power, legitimacy, and urgency (Dahan et al 2015). For example, Chinese privately owned firms, which naturally hold disadvantages when competing with state-owned enterprises (SOEs) (Cull et al 2015;Huang and Rice 2012;McMillan and Woodruff 2002;Schuler et al 2017;Xu et al 2013), devote great resources to manage their relationships with governments at each administrative level (Jia et al 2019;Xu et al 2015).…”

Section: Introductionmentioning

confidence: 99%

“…Although China forbids typical corporate political activities, such as lobbying and political contributions, managers pay great attention to the political role of corporate social responsibility (CSR) by ingratiating themselves with governments (Jia et al 2019;Wang and Qian 2011;Zhang et al 2016). Therefore, these studies mainly claim that privately owned firms, because of their dependence on governments (Hillman et al 2004;Sutton et al 2020), should actively engage in social efforts to differentiate themselves, achieve political legitimacy, and access government-controlled resources (Jia et al 2019). In particular, political legitimacy means "the extent to which the government views the firm's actions as being in accordance with norms and laws" (Marquis and Qian 2014, p. 127).…”

Section: Introductionmentioning

confidence: 99%

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Hiding in the Crowd: Government Dependence on Firms, Management Costs of Political Legitimacy, and Modest Imitation

Xiang

Zhang

2021

J Bus Ethics

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Although previous studies primarily claim that government-dependent firms can actively engage in compliance activities in order to achieve political legitimacy, access government resources, and build competitive advantages, these studies largely ignore how firms react when firm-dependent governments exert coercive pressures. We thus introduce institutional theory and the behavioral theory of social performance to develop a model of modest imitation, and we propose that the more governments depend on privately owned firms, the more firms demonstrate average social performance in order to balance efficiency concerns with political legitimacy threats. Meanwhile, whether firms imitate peers' social performance depends on the magnitude of institutional rigidity. In turn, issue salience and spatial proximity undermine modest imitation, and political connections strengthen modest imitation. We study how all listed, privately owned firms react to the Chinese government's call for social engagement in poverty alleviation initiated in 2015. This study uses a two-stage Heckman selection model to correct for sample-selection bias, and the results provide strong support for our arguments. This research thus extends our understanding of modest imitation in response to coercive pressure from-dependent governments.

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Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Hiding in the Crowd: Government Dependence on Firms, Management Costs of Political Legitimacy, and Modest Imitation

Xiang

Zhang

2021

J Bus Ethics

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“…Rather, they are problematic if they are not dependable. In other words, dependence is problematic and needs to be managed when it involves uncertainty (Sutton et al , 2021). Therefore, uncertainty is central to RDT and stimulates a firm's motivation to act or respond (Parker and Ameen, 2018).…”

Section: Literature Review and Hypotheses Developmentmentioning

confidence: 99%

“…When firms purchase goods, services and other resources on a worldwide scale, they are also exposed to notable set of risks (Reuter et al , 2010). Therefore, firms face more uncertainty about the actions of foreign suppliers and, from the resource dependence theory (RDT) perspective (Sutton et al , 2021), this uncertainty usually grows as the amount of needed resources increases and as alternative sources of the resources decrease. We accordingly argue that two dimensions of supplier globalization are crucial in shaping firm behavior: depth and width.…”

Section: Introductionmentioning

confidence: 99%

The effect of supplier globalization on firm innovation: a resource dependence theory perspective

Wang

Liu

2021

IMDS

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PurposeEither buying or making is predicted by the existing literature for firms to reduce dependence. However, firms in the rapid globalization are found to adopt a pattern of buying and making. Specially, they critically rely on foreign firms for needed materials and goods, and invest in innovation against the uncertainty of potential supply disruptions simultaneously. Therefore, this paper seeks to investigate how the depth and width of supplier globalization shape firm innovation together. Moreover, the moderating effects of institutional distance and market competition are also examined in the paper.Design/methodology/approachGrounded on the resource dependence theory, this paper develops a theoretical framework and tests the proposed hypotheses by Poisson model using secondary data from 502 Chinese listed firms with foreign suppliers.FindingsThe depth of supplier globalization has a positive impact on firm innovation, while the width of supplier globalization weakens firm innovation. The depth and width of supplier globalization further interact negatively to influence firm innovation. Moreover, this relationship is enhanced when firms establish relationships with foreign firms with greater institutional distance and is weakened when firms face fiercer product competition.Originality/valueThe authors contribute to the literature by evidencing that the existence of foreign suppliers results in firms' enhancement of innovation to secure their operations and showing that diversifying the country origins of foreign suppliers is an effective means to reduce firms' uncertainty about supply disruption. We also advance the understanding regarding the contextual factors in which firms are more likely or less likely to manage the uncertainty about supplier globalization.

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“…Indeed, government dependence has been considered as one of the most difficult dependence relationships to manage due to the government's large size, monopolistic power, and ability to change the rules of the game [29,30]. Therefore, firms have very few available tactics to manage government dependence, one of them being corporate political activity, such as contributions to political campaigns [31,32].…”

Section: Government Dependence and Attention Allocationmentioning

confidence: 99%

Multiple Goals, Attention Allocation, and the Intention-Achievement Gap in Energy Efficiency Innovation

Kim

Yang

2020

Sustainability

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Although improving energy efficiency has many benefits, including not only reducing pollution and climate change but also enhancing productivity and competitiveness, many firms still do not adopt energy efficiency innovation. In this study, we suggest inadequate attention allocation as a barrier to energy efficiency innovation, making firms fall into the intention-achievement gap when they simultaneously pursue multiple innovation-related goals. Due to limits in attention resources, competing innovation goals are likely to divert the firms’ focus of attention away from energy efficiency innovation, making them fail to achieve as much as they had initially intended. In addition, we argue that organizational innovation and government dependence will mitigate the attention dispersion effect of multiple goals by enhancing attention capacity and redirecting attention focus, respectively. We empirically examined our hypotheses in the context of Korean manufacturing industries between 2011 and 2013, using the Korean Innovation Survey 2014 data, and found supports for all hypotheses. In particular, we found that even a small increase in the diversity of innovation goals leads to a substantial likelihood of the intention-achievement gap and that organizational innovation and government dependence help to close the gap, but to a limited extent. Finally, theoretical contributions and practical implications are discussed.

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Resource Dependence, Uncertainty, and the Allocation of Corporate Political Activity across Multiple Jurisdictions

Cited by 68 publications

References 83 publications

Hiding in the Crowd: Government Dependence on Firms, Management Costs of Political Legitimacy, and Modest Imitation

Hiding in the Crowd: Government Dependence on Firms, Management Costs of Political Legitimacy, and Modest Imitation

The effect of supplier globalization on firm innovation: a resource dependence theory perspective

Multiple Goals, Attention Allocation, and the Intention-Achievement Gap in Energy Efficiency Innovation

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