The determinants of corporate political strategy in Chinese transition

Corporate political strategy (CPS) formulation in Chinese transition is an area with little empirical work. We fill this gap validly and the primary focus of this study is to examine the firm‐ and industry‐level factors influencing Chinese firms' political strategy choice. Empirical support is found for the taxonomy of corporate political strategies in Chinese transition—that is direct participation strategy, financial incentive strategy, prolocutor strategy, institution innovation strategy, government association strategy and government involvement strategy. The results indicate that there is no consistently significant firm‐ and industry‐level predictor of all six political strategies and we explore what determinants are related to each specific decision independently. We also verify the random effects of industry‐level variables and our hypotheses are tested through using general evaluation equations (GEEs). Our study aims to be helpful to point managers toward both industrial environments and internal resources to consider when making appropriate political strategy choices and thus improve Chinese firms' strategy management level. Some implications of findings are also discussed finally. Copyright © 2007 John Wiley & Sons, Ltd.