Title: Perks, political networks and institutional environment

Authors: Wei Zhou; Dan Yang; Yude Xu; Huilin Zhu

Addresses: School of Economics and Management, Southwest University of Science and Technology, Mianyang 621010, China. ' School of Business Administration, Southwest University of Finance and Economics, Chengdu 610074, China. ' Research Institute for Fiscal Science, Ministry of Finance, 100142, China. ' Department of Economics, Temple University, 19122, USA

Abstract: Collecting the data from the listed companies in China from 2005 to 2007, this study examined the impacts of the executives' political networks on business operations, and reveals that under the transition economics system, perks reflect the business damage because of the lack of institutional arrangements. This study found that the political networks in the state-owned companies brought a larger scale of on-the-job expenditure compared with the private companies. We also found that promoting the market reform and accelerating the institutional environment construction could inhibit the demand of political networks, and improve the enterprise performance.

Keywords: political networks; perks; enterprise performance; institution backgrounds; institutional environments; listed companies; China; company executives; business operations; transition economics; economic systems; business damage; institutional arrangements; state-owned companies; on-the-job expenditure; private companies; market reforms; social networking; social network analysis; enterprise management.

DOI: 10.1504/IJIEM.2011.045109

International Journal of Internet and Enterprise Management, 2011 Vol.7 No.4, pp.349 - 365

Received: 04 Jun 2009
Accepted: 12 Oct 2009

Published online: 26 Jan 2012 *

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