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Choi, Seong-jin; Liu, Huilong; Yin, Jun; Qi, Yunfei; Lee, Jeoung Yul
Journal of business research, 12/2021, Letnik: 137Journal Article
Do external uncertainties hold back or accelerate firms’ strategic change? To examine this issue, we develop a theoretical framework on the relationship between policy uncertainty caused by political turnover and the level of a firm’s strategic change and also theorize how political connections and financial resources affect firms’ response in the form of strategic change to environmental uncertainty. We test our framework with 16,451 firm-year observations of listed firms in China from 2008 to 2015 and find that political turnover has a negative influence on the level of a firm’s strategic change. Moreover, this influence is mitigated by political connections and/or financial resources.
