Title: Managerial ties with local firms and governments: an analysis of Japanese firms in China

Authors: Naoki Ando; Daniel Z. Ding

Addresses: Faculty of Business Administration, Hosei University, 2-17-1 Fujimi Chiyoda-ku, Tokyo 102-8160, Japan ' Department of Marketing, City University of Hong Kong, Tat Chee Avenue, Kowloon Tong, Hong Kong

Abstract: This study explores how managerial ties between foreign firms and local firms and those between foreign firms and local government officials affect the performance of firms operating in transition economies. Using survey data collected from Japanese firms operating in China, this study finds that managerial ties between foreign firms and both local firms and local government officials are positively associated with the performance of Japanese firms in China. The study also examines how attributes specific to foreign firms operating in transition economies moderate the positive effect of managerial ties on the performance of foreign firms. Three significant moderators: host country experience, strategic orientation, and local market knowledge of foreign firms, are highlighted in the analysis.

Keywords: managerial ties; social capital; host country experience; strategic orientation; transition economies; foreign subsidiaries; subsidiary performance; local firms; local government; emerging markets; China; Japanese firms; Japan; local market knowledge.

DOI: 10.1504/IJBEM.2012.047778

International Journal of Business and Emerging Markets, 2012 Vol.4 No.3, pp.181 - 199

Received: 23 Apr 2011
Accepted: 23 Aug 2011
Published online: 15 Nov 2014 *

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