In this study, we propose hierarchical inconsistency among family-member top leaders as a novel structural reason for nonfamily executives' high compensation in family firms. Hierarchical inconsistency among family-member top leaders is observed when the head in the formal business hierarchy is not ranked the highest among family-member executives and directors in the informal family hierarchy. We argue that this structure triggers contestations between the heads of the two hierarchies, adding complexity and challenges to nonfamily executives' jobs. Family firms with hierarchical inconsistency among family-member top leaders need to offer higher compensation to make up for the demanding features of these professional managers' work. The positive relationship between hierarchical inconsistency and nonfamily executives' compensation is weaker when the proportion of female family-member executives and directors is high and when the formal head's tenure is long. We use data from publicly listed family firms in China to test our arguments. Our study contributes to family business research by suggesting how the interplay between family relationships and formal organizational structures influences job features and compensation decisions.

This study aims to explore the dynamics of leadership reconfiguration within emergent state-owned enterprises (SOEs), i.e., privately owned enterprises (POEs) that have been acquired by SOEs. From an institutional logic perspective, we argue that the emergence of these SOEs reflects a process in which POEs, previously dominated by market logic, incorporate state logic and transition to a hybrid form. However, this process presents a paradox for emergent SOEs: while a greater extent of reconfiguration of leadership helps them gain greater legitimacy in front of state-related institutional referents, it also results in greater conflicts between members adhering to different logics. To address this paradox, we theorize on the differences in the reconfigurations of the board and top management team (TMT) by respectively connecting their functions to institutional control and agency, two typical forms of institutional power. Our analysis reveals that emergent SOEs tend to experience reconfiguration more in the board while less in TMT. Furthermore, we find that these main effects are moderated by the industrial state-ownership density and acquirees' preacquisition political connections. Our study contributes to the SOE and M&A literature by highlighting the uniqueness of emergent SOEs arising from POE-to-SOE acquisitions. Additionally, we propose a strategy to reconcile legitimation and internal stabilizations during logic hybridizations, thereby contributing to the institutional logic literature.

This study extends the extant literature on executive pay dispersion by exploring the cultural-cognitive social determinants. We investigate how religious institutional environments, including Buddhism- and Confucianism-based institutions, shape vertical executive pay dispersion. We theorize that a Buddhism-based institutional environment is negatively related to vertical executive pay dispersion. In contrast, we propose competing hypotheses regarding how a Confucianism-based institutional environment affects vertical executive pay dispersion. With a sample of Chinese public firms, we find that both Buddhism- and Confucianism-based institutional environments are negatively associated with a firm's vertical executive pay dispersion. Supplementary analyses show that the aforementioned main effects are attenuated when a firm is embedded by a communist party branch and has a younger CEO.

Whereas emerging market firms (EMFs) face severe legitimacy barriers when entering global markets, whether and under what conditions green innovation can help them gain legitimacy remains under-examined. This article argues that green innovation can help EMFs obtain regulatory and social legitimacy in host countries and consequently boost their exports. Based on a panel dataset populated by 254 Chinese-listed manufacturing companies from 2011 through 2017, this article finds that green innovation is positively associated with EMF export performance. Moreover, this positive relationship is stronger when host-country political risk is lower or host-country buyer sophistication is higher but becomes weaker for state-owned EMFs. These findings enrich the legitimacy-based view and international business literature by identifying the role of green innovation in boosting EMF export performance and specifying important institutional contingencies.

Does Chinese aid to African countries trigger Chinese foreign direct investment? Bridging the literature on the impact of foreign aid on foreign direct investment (FDI) and that on state ownership, we consider FDI by China's state-owned enterprises (SOEs) compared with that of its privately owned enterprises (POEs) and find FDI by the former is more likely to follow Chinese governmental aid to Africa. Borrowing from institutional theory, we posit that FDI by SOEs follows political imperatives while FDI by POEs pursues market motives. Using data from multiple sources on 3,760 Chinese FDI projects in Africa between 2001 and 2015, we find a correlation between SOE FDI and government aid than that of POEs; that aid has a greater impact on the probability of FDI when the policies of the host country and those of China are in sync, especially in the case of SOEs; and that in low-investment-risk countries the link between aid and investment is weakened, especially in the case of POEs. The results are robust and consistent across different measures and analyses. We contribute to the literature on the relationship between aid and FDI, as well as to that on varieties of capitalism.

This article highlights CSR disclosure as a strategic response of Chinese multinational enterprises (MNEs) to the social risk they face in host countries. Deviating from prior research that aims to directly measure social risk, we offer a new approach to isolate the effect of social risk by leveraging China's Belt & Road Initiative (BRI) as the research context, under which Chinese MNEs are largely protected from political risk in membership countries but are exposed to substantial social risk from local nongovernment stakeholders. Results from difference-in-differences analyses show that after the enactment of the BRI, Chinese MNEs investing in BRI countries significantly increases their likelihood of CSR disclosure than that of their counterparts investing in non-BRI countries. Further, such effects are more pronounced for state-owned MNEs and MNEs in natural resource industries. This research enriches the international business literature on the relationship between political risk and social risk, and that between corporate political actions and corporate social responsibility.

Although extant research has highlighted the tangible benefits of bridging ties that interlink network communities, our understanding of the determinants of a firm's propensity to form new bridging ties is scarce. Drawing on the behavioral theory of the firm, we conceptualize the formation of new bridging ties as a consequence of decision-makers' bounded rationality and verify the effect of performance feedback on the share of new bridging ties. Additionally, we contend that decisions regarding forming new bridging ties in response to performance feedback are bounded by CEOs' experience. We use a longitudinal dataset of Chinese publicly listed firms in the pharmaceutical industry from 2010 to 2020. The results indicate that the magnitude of a firm's outperformance relative to its aspirations positively affects the share of new bridging ties, while the magnitude of a firm's underperformance relative to its aspirations has an inverted U-shaped relationship with the share of new bridging ties. CEOs' academic and political experience strengthens the positive relationship between the magnitude of a firm's outperformance relative to its aspirations and the share of new bridging ties. CEOs' political experience flattens the inverted U-shaped effect of the magnitude of a firm's underperformance relative to its aspirations on the share of new bridging ties.

The management literature has extensively explored how firms respond to underperformance through innovation, with prior studies based on the behavioral theory of the firm and the threat-rigidity thesis producing inconsistent results. The shifting focus of attention model provides crucial insights to reconcile this contradiction. We extend this model by highlighting the temporal dimension of performance shortfall. Specifically, we argue that underperformance duration flattens the inverted U-shaped relationship by attenuating both the problemistic search and threat rigidity mechanisms. The empirical results from a sample of Chinese listed manufacturing firms between 2010 and 2019 support our predicted inverted U-relationship between underperformance intensity and research and development (R&D) investment, and the moderating effect of underperformance duration. Interestingly, the inverted U-shape flips to a U-shape if underperformance extends into the long term. We contribute to the literature on performance feedback by considering both underperformance intensity and duration, which conceptualizes their interaction and reconciles extant contradictory findings from a new perspective. We also add new insights into innovation research by theorizing and examining the overlooked boundary condition for the curvilinear relationship between performance shortfalls and R&D investments, which calls for future research to explore the dynamics of the relationship and account for temporal effects.

Building on the literature on managerial myopia, we investigate how chief executive officers’ (CEOs) international experience in advanced market economies affects their firms' investment horizons in a transitioning economy. To overcome myopia, CEOs should possess the knowledge needed to manage current tasks, thereby freeing up cognitive resources for future considerations. In the context of our theorizing, we argue that international experience in advanced market economies equips CEOs with knowledge about how to deal with their current tasks of market-oriented adaptation in a transitioning economy, freeing up cognitive resources for considering longer-term investment horizons. Additionally, the effect of CEO international experience in advanced market economies on firm investment horizon is stronger under conditions that increase the cognitive burden on CEOs to perform market-oriented adaptation tasks – specifically, when there is a high scope of pro-market reform, high intensity of foreign competition, analyst coverage, and a high level of institutional ownership. Our estimation based on a matched sample of 204 Chinese CEOs during the period 2002–2019 supports the majority of our predictions. Our study contributes to research on firm investment horizon, CEO international experience, and transition economies.

This study examines how the managerial interpretation of incentive arrangement affects corporate engagement in social areas, as reflected in corporate social performance, from two interrelated perspectives: the political influence view and the normative agency view. Building the theoretical framework on state-owned enterprise (SOE) executives' dual-career tracks perspective, we contend that economic factors (performance decline and relative pay gap) and political factors (socialist imprints and political career horizon) could divergently reshape the interpretation of incentive arrangement on corporate social performance. Using ‘Pay Ceiling Order’ as a quasi-natural experiment context, a secondary analysis, and a controlled experiment reveal that compensation restriction on top executives causes a decrease in corporate social performance. This relationship is weakened when there are stronger socialist imprints inherited by a focal firm and when the executives have a longer political prospect. In contrast, the relationship is strengthened when firms face severe performance declines and when the executives' compensation is relatively lower than peers. The findings show that compensation is an indispensable incentive joining with political and economic factors, enabling SOEs to engage in social areas. We discuss the implications of understanding top executive incentives with incentive arrangements and how the government purpose influences top executive responses to compensation incentive in ways that matter for long-term social value.

Based on social norms theory, we examine the impact of local gambling culture, an unexpected result of government-permitted lotteries, on enterprise bribery. We propose that local gambling cultures can promote active enterprise involvement in bribery activities by reinforcing the speculative psychology of enterprise decision-makers. In addition, we argue that local gambling culture is less likely to lead female (returnee) chairpersons to develop speculative psychology than male (nonreturnee) chairpersons. This, in turn, allows female (returnee) chairpersons to undermine the positive impact of local gambling culture on involvement in enterprise bribery. Based on 11 years of empirical data obtained from privately listed Chinese companies (including 2,637 listed companies with 15,036 firm-year data points), we obtain empirical evidence to support most of these views. This study is the first to explore the relationship between local gambling culture and enterprise bribery, and important insights are provided for shareholders and policy-makers to better curb enterprise bribery.

This study adopts the resource-based view (RBV) to explain the difference in firm profit and growth determinants. We argue that profit is driven more by valuable, rare, inimitable, and non-substitutable (VRIN) resources, and growth is driven more by versatile resources. Since some versatile resources, such as cash, are less firm-specific, the firm effect is more critical in determining profit than growth. We also expect that emerging market firms are more capable of utilizing versatile resources than developed market firms, and developed market firms are more capable of utilizing VRIN resources than emerging market firms. As a result, the determinants of firm performance also differ between emerging and developed markets. The study employs multilevel mixed models to decompose firm performance in US, Chinese, and global samples. The findings confirm that the firm effect is more important in influencing profit than growth, persisting across all three samples. The firm effect is also more important in influencing performance in developed countries than in emerging markets.

Research on female leadership has documented that female-led firms tend to engage in lower risk-taking activities than male-led firms and attributed it to females' higher propensity for risk aversion. Nevertheless, this claim and its associated findings have been increasingly challenged. In this article, we address the unclear pattern of females' risk preference in leadership by contextualizing the effect of chair gender on corporate acquisitions in the context of state-owned enterprises (SOEs) in China. Drawing on expectancy violation theory, we propose that female chairs are more inclined to take risks when they operate in contexts that encourage female agency. We further explore self-affirmation mechanisms through two moderators: gender stereotype threats and self-efficacy. An analysis of chairs of 1,265 publicly listed SOEs in China from 2008 to 2020 supports predictions that female chairs are more likely than male chairs to engage in firm acquisitions. The effects are amplified under low levels of female executive representation and high levels of political appointments held by female chairs. The study shows that context determines how extensively gender affects risk-taking. It offers new insights into when and why female leaders exhibit higher levels of risk-taking in Chinese SOEs.

We examine how the central government's management of subnational governments' agency influences the smartness of the latter's industrial specialization choices. Based on smart industrial specialization theory and agency theory, we hypothesize how two central government tools governing subnational governments' agency – facilitating their organizational efficacy and promoting their officials to higher ranks – explain recent industrial specialization choices by China's 31 provincial governments. We find that provincial governments with greater organizational efficacy, measured by access to better-resourced local state-owned enterprises in focal industries, make smarter specialization policies. In addition, we show that provincial governments with greater numbers of officials previously promoted to the central government make, contrary to conventional wisdom, potentially less smart specialization policies. Our research extends smart specialization theory by explaining that central government tools governing subnational agency problems can have knock-on effects making subnational governments' industrial specialization choices smart or unsmart.

Despite the salutary effects of mask wearing broadly recognized during the COVID-19 pandemic, little is known about the consequences of wearing masks in the workplace. The current research raises the question of whether and how mask wearing may impact employees' emotional well-being at work. Drawing on emotion regulation theory (e.g., Gross, 1998, 2015), we propose that mask wearing enables employees to adopt more authentic emotional displays, which in turn decreases emotional exhaustion. Furthermore, guided by the social interaction model of emotion regulation (Coté, 2005), we further posit that for employees whose work requires more frequent face-to-face interaction, the positive impact of mask wearing on emotional exhaustion becomes more significant. Across a pilot study and a three-wave field survey, we find support for this hypothesized model. Implications of these findings for future theorizing and research on mask wearing are discussed.

In the previous issue (Vol. 20, Issue 3), we published a perspective article entitled ‘Responsible Research: Reflections of Two Business Scholars Doing Mental Health Research during COVID-19’, by Zhang and Chen. The pair represents two management scholars who ventured into medical research during the COVID pandemic. Zhang and Chen shared their insights from this exploration with the broader community of management scholars, highlighting key differences in how the field of medicine balances the goals of rigor and relevance and judges what research deserves to be published.

As the need for collaboration across multiple organizations to deal with complex social issues such as poverty, crime, and public health grows, Public–Private Partnership (PPP) is of increasing importance. However, little is known about when and why private firms engage in such partnerships. Drawing on upper-echelon theory and the information-processing perspective, we highlight the importance of institutional knowledge and information embedded in CEO cross-sector work experience. We argue that such tacit knowledge and information enables CEOs to better identify the potential risks associated with PPPs. Consequently, CEOs with cross-sector work experience tend to be more cautious in participating in such partnerships, especially in developing economies like China, where private actors face greater information incompleteness concerning post-collaboration hazards due to the government's selective disclosure. Moreover, we develop a multi-moderator framework in which regional marketization and political connection alter the main effect by serving as supplementary information channels for private actors. A panel dataset of Chinese private listed firms from 2013 to 2021 provides strong support for our hypotheses. This study contributes to our understanding of the micro-foundation of PPP formation and draws attention to CEOs’ prior career experiences in different organizational forms.