Social ties and firm performance : The mediating effect of adaptive capability and supplier opportunism

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

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Original languageEnglish
Pages (from-to)226-232
Journal / PublicationJournal of Business Research
Online published14 Feb 2017
Publication statusPublished - Sep 2017
Externally publishedYes


This study integrates dynamic capabilities and relational governance theories to examine how business ties and political ties affect firm performance. The findings from a survey of 187 Chinese distributors of construction and decoration materials indicate that increased firm adaptive capability and reduced opportunism mediate the contribution of both ties to firm performance. In addition, legal enforceability and demand uncertainty determine the relative prominence of the two process intermediaries in joint consideration with the type of social ties (i.e., business ties and political ties). Specifically, political ties foster firm performance mainly by constraining supplier opportunism when legal enforceability is weak, whereas adaptive capability has a stronger mediating effect in the link between business ties and firm performance when demand uncertainty is high.

Research Area(s)

  • Adaptive capability, Demand uncertainty, Legal enforceability, Social ties, Supplier opportunism