Exploring Corporate Political Activity (CPA) in China

FANG JIA, YAN LAI

Abstract


This paper focuses on the utilization of corporate political activity (CPA), which is an important cultural and social element in China, and the impact of CPA on firm performance. This research proposes that corporate political activity (CPA), in the forms of lobbying, co-optation and China-specific political connections, increases a firm’s political influence, and hence secures firms’ legitimacy in regulatory aspects. CPA is positively related to firm performance, including reduced uncertainty, reduced transaction costs and increased long-term sustainability.

Keywords


Corporate Political Activity, Legitimacy, Uncertainty, PerformanceText


DOI
10.12783/dtem/icem2019/31139

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