Cleaning House Before Hosting New Guests: A Political Path Dependence Model of Political Connection Adaptation in the Aftermath of Anticorruption Shocks

45 Pages Posted: 3 Jul 2021

See all articles by Han Jiang

Han Jiang

Tulane University - A.B. Freeman School of Business

Nan Jia

University of Southern California - Marshall School of Business

Tao Bai

University of Queensland - Business School

Garry D. Bruton

Texas Christian University - M.J. Neeley School of Business

Date Written: May 25, 2021

Abstract

We develop a political path dependence model that integrates the network embeddedness perspective and the literature on corporate political strategy to understand how firms adapt their political connections when anticorruption efforts lead to the turnover of government officials. We posit that although firms that have close associations with ousted corrupt officials can benefit from both removing existing political connections (“cleaning house”) and developing new connections with their successors (“hosting new guests”), political path dependence enables firms to do the former but constrains them from doing the latter. These effects are magnified when firms are highly dependent on the government, and when the ousted corrupt officials have great political power. Evidence from anticorruption campaigns in China between 2012 and 2018 lends support for our theoretical predictions.

Keywords: political connection, path dependence, network embeddedness, China

Suggested Citation

Jiang, Han and Jia, Nan and Bai, Tao and Bruton, Garry, Cleaning House Before Hosting New Guests: A Political Path Dependence Model of Political Connection Adaptation in the Aftermath of Anticorruption Shocks (May 25, 2021). Strategic Management Journal, Forthcoming , USC Marshall School of Business Research Paper Sponsored by iORB, No. Forthcoming, Available at SSRN: https://ssrn.com/abstract=3871345

Han Jiang (Contact Author)

Tulane University - A.B. Freeman School of Business ( email )

7 McAlister Drive
New Orleans, LA 70118
United States

Nan Jia

University of Southern California - Marshall School of Business ( email )

701 Exposition Blvd
Los Angeles, CA California 90089
United States

Tao Bai

University of Queensland - Business School ( email )

Brisbane, Queensland 4072
Australia

Garry Bruton

Texas Christian University - M.J. Neeley School of Business ( email )

Department of Management
Fort Worth, TX 76129
United States
817-257-7421 (Phone)
817-257-7227 (Fax)

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