TY - JOUR
T1 - Impact of perk expenditures and marketing expenditures on corporate performance in China
T2 - The moderating role of political connections
AU - Cheng, Louis T.W.
AU - Chan, Ricky Y.K.
AU - Leung, T. Y.
N1 - Funding Information:
The work described in this paper was supported by the Hong Kong Polytechnic University 's Research Grants (Projects A/C: G-YBNW and G-UA4S ) and T.Y. Leung acknowledges financial support from the Open University of Hong Kong ( R2056 ).
Funding Information:
The work described in this paper was supported by the Hong Kong Polytechnic University's Research Grants (Projects A/C: G-YBNW and G-UA4S) and T.Y. Leung acknowledges financial support from the Open University of Hong Kong (R2056).
Publisher Copyright:
© 2018 Elsevier Inc.
PY - 2018/5
Y1 - 2018/5
N2 - This study examines the performance implications of guanxi-related perk expenditures among listed Chinese firms. Specifically, it investigates how these expenditures influence long-term market-based corporate performance (Tobin's Q and market share) as compared with marketing expenditures. It also examines if political connections moderate this influence. Overall, the findings suggest that guanxi-related perks play an essential marketing role in enhancing long-term corporate success. Furthermore, although marketing expenditures exert much stronger influence on Tobin's Q than guanxi-related perks do, they exert no significant influence on market share. In summary, despite firms' much heavier investments in traditional marketing activities than guanxi-related perk activities, the findings highlight the significant performance contribution that guanxi-related perks can still make to a firm. Moreover, this study reveals that political connections weaken the positive impact of guanxi-related perks on both performance measures, thus reminding executives of the dampening effect of these connections on the effective use of perk spending.
AB - This study examines the performance implications of guanxi-related perk expenditures among listed Chinese firms. Specifically, it investigates how these expenditures influence long-term market-based corporate performance (Tobin's Q and market share) as compared with marketing expenditures. It also examines if political connections moderate this influence. Overall, the findings suggest that guanxi-related perks play an essential marketing role in enhancing long-term corporate success. Furthermore, although marketing expenditures exert much stronger influence on Tobin's Q than guanxi-related perks do, they exert no significant influence on market share. In summary, despite firms' much heavier investments in traditional marketing activities than guanxi-related perk activities, the findings highlight the significant performance contribution that guanxi-related perks can still make to a firm. Moreover, this study reveals that political connections weaken the positive impact of guanxi-related perks on both performance measures, thus reminding executives of the dampening effect of these connections on the effective use of perk spending.
KW - Corporate performance
KW - Emerging economies
KW - Perk
KW - Political connection
UR - http://www.scopus.com/inward/record.url?scp=85044277388&partnerID=8YFLogxK
U2 - 10.1016/j.jbusres.2018.01.046
DO - 10.1016/j.jbusres.2018.01.046
M3 - Article
AN - SCOPUS:85044277388
SN - 0148-2963
VL - 86
SP - 83
EP - 95
JO - Journal of Business Research
JF - Journal of Business Research
ER -