Do power distance and market information foster or impede performance of Chinese new ventures? The moderating role of market growth
ISSN: 1750-614X
Article publication date: 17 October 2019
Issue publication date: 9 December 2019
Abstract
Purpose
The purpose of this paper is to examine the moderating effects of market growth on the relationships between power distance and new venture performance and between market information utilization in new ventures and new venture performance in China.
Design/methodology/approach
This study uses content analyses and OLS regressions.
Findings
First, power distance and market information utilization have positive effects on Chinese new venture performance. Second, in a low market growth environment, increasing power distance increases Chinese new venture performance. Third, in a high market growth environment, increasing power distance decreases, not increases, Chinese new venture performance.
Research limitations/implications
This study contributes to the market orientation literature by examining the moderating effects of market growth on the market information utilization-performance relationship in China. This study also adds to the existing understanding of power distance and market information utilization in contingency theoretical perspective.
Practical implications
Chinese new ventures operating in a high-growth market should reduce power distance. However, when operating in the low market growth industry, Chinese new ventures should increase power distance. While all Chinese new ventures should use market information to make decisions, the roles of market information are more important for Chinese new ventures operating in high market growth industries than for those operating in low market growth industries.
Originality/value
This study examines the moderating effects of market growth on the positive relationship between power distance and Chinese new venture performance and the positive relationship between market information utilization on Chinese new venture performance in the same model.
Keywords
Acknowledgements
This paper forms part of a special section “Chinese management and cross-cultural management”, guest edited by Zheng Fan, Tingting Lu and Peihua Fan.
The corresponding author for this article is Dr Haili Zhang. Authors wish to thank the Guest Editor Zheng Fan and the two anonymous reviewers for their suggestions for an earlier version of this article. The development of this study was supported by the Natural Science Foundation of Shaanxi Province of China (Grant 2018JQ7003) and by Shaanxi Province of China, Department of Education Scientific Research Plan Projects (Grant 18JK0367). The data collection was jointly designed by Professor Michael Song and Professor Tomoko Kawakami. The authors acknowledge the financial support for data collection provided by MEXT KAKENHI #17330100, Grant-in-aid for Scientific Research (B) by Japan Ministry of Education, Culture, Sports, Science and Technology (2005-2007).
Citation
Zhang, H. and Song, M. (2019), "Do power distance and market information foster or impede performance of Chinese new ventures? The moderating role of market growth", Chinese Management Studies, Vol. 13 No. 4, pp. 877-894. https://doi.org/10.1108/CMS-04-2018-0472
Publisher
:Emerald Publishing Limited
Copyright © 2019, Emerald Publishing Limited