How foreign firms achieve competitive advantage in the Chinese emerging economy : Managerial ties and market orientation

Research output: Journal Publications and Reviews (RGC: 21, 22, 62)21_Publication in refereed journal

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Detail(s)

Original languageEnglish
Pages (from-to)856-862
Journal / PublicationJournal of Business Research
Volume63
Issue number8
Publication statusPublished - Aug 2010

Abstract

As China experience unprecedented changes in its social, legal, and economic institutions, on what should foreign firms focus more to overcome this challenge, managerial ties or market orientation? This study investigates how managerial ties and market orientation affect competitive advantage and, consequently, firm performance in China. On the basis of a survey of 179 foreign firms in China, we find that both managerial ties and market orientation can lead to firm success-but in different ways. Market orientation enhances firm performance by providing differentiation and cost advantages, whereas managerial ties improve performance through an institutional advantage (i.e., superiority in securing scarce resources and institutional support). Institutional advantage, in turn, leads to differentiation and cost advantages and consequently superior performance. © 2009 Elsevier Inc.

Research Area(s)

  • Competitive advantage, Emerging economy, Institutional advantage, Managerial ties, Market orientation