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This paper examines the relationship of entrepreneurial orientation (EO), new product development (NPD), legitimacy (political and market) and firm performance (FP). The authors investigate how and when EO improves FP in high-tech small and medium-size enterprises (SMEs).

The paper formulates 5 hypotheses from literature review and theoretical deduction. The hypotheses are tested using ordinary least squares (OLS) regression with data collected from 219 randomly selected SMEs operating in high-tech industries of China.

The findings show that the mechanism of EO improve FP in high-tech SMEs by considering NPD as a mediator and legitimacy as moderators: (1) NPD plays a mediating role in the relationship between EO and FP, (2) market legitimacy (ML) positively moderating the effect of EO on FP and (3) both political legitimacy (PL) and ML positively moderating the effect of NPD on FP.

For the limitations, the firms the authors’ surveyed are SMEs that are not listed companies, which cause some limitations. For the implications, the authors propose some recommendations based on the findings to help Chinese SMEs to enhance performance.

The existing research on EO–FP linkage remains elusive findings. The paper reconciled the inconsistency by providing a nuanced mechanism of how EO promotes FP in high-tech SMEs of Chinese transition economy. By explain the important role of NPD in high-tech SMEs, the findings shed light on the mediators between EO and FP and the moderators. By emphasize the different role of ML and PL in determining EO–FP and NPD–FP linkages, the findings illustrate the peculiarity of contingency factors in a transition economy.

We conceptualize corporate social capital within the context of Chinese guanxi culture. We assert that the formation and mobilization of corporate social capital are culturally and institutionally contextualized. Building upon a relational approach to corporate performance, we examine culture-sensitive properties of Chinese guanxi and compare guanxi social capital with non-guanxi social capital. We then explain why guanxi-based corporate social capital is of growing significance to the Chinese transitional economy in an era of increasing market competition and institutional uncertainty. We conclude by proposing a research agenda about the roles that guanxi-based corporate social capital plays for boosting corporate performance.

The climate for technical innovation has been improving in the past few years in China. This paper describes a case research concerning technical innovation practices success in three Chinese state‐owned enterprises (SOEs) in the manufacturing industry. This is executed by applying a technical innovation audit tool based on “Western” good practices.

Studies on technical innovation in the Chinese SOEs started in the 1990s, but most investigations in this field were based on statistical survey and mathematical modelling. In this research, case study research method, including such strategies as open‐ended, in‐depth questions, intensive interviews and observations, are applied for the validity of information.

The data and results reveal that the investigated Chinese SOEs have already some mechanisms for innovation in place. But there is still room for improvement and enhancement with respect to the effect on innovation success. It is also concluded that benchmarking (through the application of the technical innovation audit tool) does guide the Chinese management toward deciding which innovation mechanisms to adopt so as to provide the basics for innovation success. Additionally, based on the case studies the interesting conclusion could be drawn. In the context of the Chinese economy in transition, the case companies with less openness to the market (i.e. with high government involvement) have a more widespread use of innovation mechanisms.

The last finding seems to contradict the positive relationship between market focus and innovativeness as suggested in “Western” innovation management theories. For clarification we relate this to the way the SOEs deal with their adaptive cycle, thereby considering their way of dealing with (increased) complexity as compared to “Western” companies (complexity absorption versus reduction). The considered cases are embedded in the institutional setting of China in transition. Therefore, the conclusions and findings enrich the theory of transition by revealing the point that entering an open market abruptly may not be the solution for SOEs, which are rooted in a socialist economy, to become more competitive and more innovative. This was mostly elaborated through the influence of the two main stakeholders (i.e. government and customer/end‐user) on the openness of the SOEs and their use of innovation mechanisms in China, the largest socialist system of the world.

This paper is based on a doctoral research project, containing reliable, first hand data from the practice.

This study aims to present multi-layered embeddedness and explore the main and interaction effects of political embeddedness on the performance of private enterprises in China. This study tests multi-layered embeddedness through interaction effects between three layers, namely, political, territorial and inter-firm embeddedness. Political embeddedness is related at the personal and the firm levels.

The authors used secondary data of four non-panel waves (2002, 2008, 2010 and 2016) of large samples having identical questions based on the Chinese private enterprises’ survey. The accumulated number of business owners’ responses is a total of 10,686.

The main effects of each of the layers of embeddedness showed a positive influence on enterprise performance consistently and unchanged over time which fits the Chinese Guanxi regardless of the immense macro-economic transition. However, unexpectedly some interactions showed negative significant effects on performance.

First, business owners should be aware of the specific contribution to the performance of political embeddedness at both the firm level and the personal level. Second, the pursuit of exercising simultaneously several layers of embeddedness may be detrimental to company performance. This study provides generalizable lessons regarding different embeddedness layers beyond the context of China’s transition economy.

First, the authors extend political embeddedness to the firm level whilst in previous research this construct had been mostly related to the personal level. Second, building on the resource-based view and redundant resources the authors present the disadvantage of “over-embeddedness” as related to multi-layered embeddedness which has been understudied.

The purpose of this paper is to model the Chinese unique regulation changes with the supply-and-demand analytical framework and structure the relationship between initial public offerings (IPO) underpricing and institutional changes with the comparative static method. A well-functioning stock market is crucial to the transition into a market economy, but the Chinese stock market is somehow twisted with frequent government interventions, particularly the IPO market. Can the underpricing issue be mitigated in the changing institutional settings? Can the market-orientated incremental reform of regulations succeed in the Chinese stock market?

The theoretical analysis confirms that IPO underpricing becomes relatively better with dynamic changes of relaxation of the approval and pricing systems. Collecting and examining the data of newly listed firms from 1993 to 2010, the influence of institutional changes on IPO underpricing with regressions, such as ordinary least square (OLS), bootstrap and two stage least square (2SLS) estimation methods was further empirically examined.

The magnitude of the Chinese IPO underpricing during the past two decades is as high as 181.6 per cent on the average. The sizes of IPO underpricing significantly reduce with an increase in the issuing sizes and the ratios of price-earnings ratios. The dummy variables of government-approved regulations are negatively associated with IPO underpricing. The dummy variables of pricing regulations are positively related to IPO underpricing and the coefficients become smaller with newer regulations. Generally, the magnitude of the Chinese IPO underpricing decreases over time.

This paper enriches the IPO literature by dynamically examining the effect of institutional changes on IPO underpricing in Chinese primary markets. We argue that institutional changes characterized by incremental marketization can help to alleviate extreme IPO underpricing and to promote financial development. The Chinese transition from the planning system to the market system in the IPO market will be a long and strenuous process, but it works.

This study aims to answer few questions, such as which factors influence the local government’s choice of private firm investments; what factors influence private firms’ choice of specific local government to make a local investment; and why do some private firms gain a competitive edge by choosing a stakeholder management model of “running the government” in the context of the Chinese transition economy.

Using a case study approach, this paper provides an in-depth analysis of the Daqing–Geely Case, 2010, and explains why Geely chose Daqing considering the firm perspective and why the Daqing city Government chose Geely considering the local governments’ perspective.

This study highlights the concept of “co-beneficial” cooperation between government–business by virtue of the institutional innovation of the quasi-property system. In addition, it reveals that the private firms and local governments in the “Daqing–Geely mode” work together for mutual benefits by putting fair negotiation and contract mechanisms in place. Resultantly, private firms secure the commercial interests, and the local governments bring in improved efficiency.

This study consolidates the theory of stakeholders, thereby strengthening the current understanding of “special offer” and “universal offer.”

China has followed an unique transition from central planning to a market economy. The purpose of this paper is to examine how China's unique blend of capitalism and socialism has influenced Chinese firms’ market orientation.

Broadly speaking this paper's methodological approach can be described as a positivistic epistemology.

The paper provides insights into how Chinese institutions facilitate or hinder firms’ market orientation practices through direct effect, externality effect and indirect causal chains. The central theme is that, compared with other countries, China's unaltered political institutions and newly created market institutions have led to unique roles of coercive, normative and mimetic pressures in the diffusion of market orientation among Chinese firms. Especially, regulative institutions’ influence on other institutions is more salient in China than in many other countries.

A lack of primary data and empirical documentation and a lack of in‐depth treatment of some of the key issues are major limitations here.

The paper analyses institutional pressures facing firms operating in China and their variation across different types of firms. An understanding of these pressures is essential to devise market‐oriented approaches in the country. It also examines different institutional factors (e.g. Chinese professional associations) that influence a firm's capability to implement market‐oriented practices.

This paper's greatest value stems from the fact that it employs institutional theory as a lens to understand firms’ market orientation. The institutions‐market orientation nexus is a very important but highly underexamined subject.

Focusing on the important representative of firm intellectual capital (IC), this research explores the effects of chief executive officer’s (CEOs') managerial human capitals on sustaining superior performance in Chinese transition economy to prove the dynamic and strategic value of IC and fulfill the gap of lacking emerging market studies in this research field.

Based on dynamic managerial capability theoretical framework, the authors propose a dynamic management path to analyze the influencing mechanism of CEOs' managerial human capitals to firm performance persistence and the moderating effect of environment uncertainty. Using a panel data of Chinese publicly listed firms from 2008 to 2017, it adopts dynamic first-order autoregressive models to examine these hypotheses. Several tests are conducted to further analyze and ensure that the results are robust and reliable.

These managerial human capitals reveal heterogenous impacts on sustaining superior performance, and environment uncertainty is a valid moderating variable to further distinguish their dynamic values. The supplementary analyses show the integrating effect of an MBA degree and output functional experience is positive and significant, and the results in Chinese state-owned and private firm subsamples are distinct.

It is beneficial for corporate stakeholders to judge and select CEOs and for policymakers to improve the efficiency advantage of IC in Chinese emerging market.

This study first explores the relationship between CEOs' managerial human capitals and superior performance persistence. Through introducing a dynamic perspective, it has extended existing performance persistence research into individual level and provided a new intellectual source of sustainable competitive advantages.

Little systematic work has been completed on the incidence of employee ownership in a Chinese context. Similar to the situation in Eastern Europe, this type of ownership was quite widespread in China, particularly during the 1990s. Based on the existing literature and available statistical data, the purpose of this paper is to identify drivers of, and barriers to, the development of employee ownership in China.

The scattered evidence from the literature and official statistical sources are collected and structured in a systematic analysis where the drivers and barriers for employee ownership in the transition process from plan to market are identified at three levels: society, the company and the individual.

Employee ownership developed as a transitory stage between state and private ownership; employees acquired ownership stakes as part of the privatisation of small- and medium-sized state-owned enterprises as well as collectively owned enterprises. However, in most cases the dynamics of ownership resulted in dominant ownership by managers. This trend became more noticeable at later stages of the privatisation process.

The paper shows how policies and institutional settings at the society level are determining for the development of employee ownership.

The contribution of the paper is to give a general and systematic analysis of the development of employee ownership in China both based on a comprehensive literature review and by utilising existing statistical sources.

This paper aims to contribute to research studies on boards of directors in the Chinese transition economy that are by far, few and limited.

This paper uses basic data compilation method to investigate the board characteristics of large and medium Chinese companies listed on the Shenzhen and Shanghai Stock Exchange between 2004 and 2006. Sample data on these companies were obtained from the China Center for Economic Research (CCER) database that contains information on at least 1,350 listed companies in a particular year. Companies with missing data or incomplete information on board attributes are not included in the sample in this paper. Studies of relationships between board characteristics and firm performance in the Chinese context are compared to those studies in the West for determining whether there is a conclusive empirical outcome.

This investigation found some significant differences in board characteristics between the Chinese and Western contexts, such as non‐compliance with legal requirement, equity‐based compensation structure for board members, and lag in the establishment of Chinese board committees as compared to their counterparts in developed Western countries. In addition, the literature review reveals that studies of relationships between board characteristics and firm performance from the small community of scholars investigating the Chinese context produce inconclusive results similar to those studies of the West.

The empirical findings and literature review suggest that the prototype of an effective board may vary from one industry to another, or even from one company to another, and perhaps across time for the same company.

This contingency approach to board impact on firm performance may be relevant to companies operating in the Chinese transition economy, where factors are evolving continuously at the micro, macro, and international levels.