CEO Succession in the Emerging Markets: Political Ties, Institutions and Networks

Zhaojun Gao
(Strategy Department, Guanghua School of Management, Peking University, China)

Abstract: Drawing on the resource based view and network perspective, this paper explains how firm manage their political resources over time under the condition of different geographical institutions and inter-organizational networks. Firms obtain political resources through managers’ personal connections, and in the dynamic environment, such resources evolve in the life cycles. However, the value of political ties decreases when firms access more learning opportunities in inter-organizational networks and with geographical institutions well developed. We test this effect in CEO turnovers by using data from China listed firms in 2008 and compare the contextual roles of political resource in affecting CEO dismissals. The contributions are due to a synthesis of institutional and ecological perspectives and to research on CEO succession in emerging market and organization learning in networks.

Key words: political resource; CEO dismissal; dynamic RBV; networks, institutions

JEL code: M51