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Title: Impact of perk expenditures and marketing expenditures on corporate performance in China : the moderating role of political connections
Authors: Cheng, LTW 
Chan, RYK 
Leung, TY
Keywords: Perk
Political connection
Emerging economies
Corporate performance
Issue Date: 2018
Publisher: Elsevier
Source: Journal of business research, May 2018, v. 86, p. 83-95 How to cite?
Journal: Journal of business research 
Abstract: This study examines the performance implications of guanxi-related perk expenditures among listed Chinese firms. Specifically, it investigates how these expenditures influence long-term market-based corporate performance (Tobin's Q and market share) as compared with marketing expenditures. It also examines if political connections moderate this influence. Overall, the findings suggest that guanxi-related perks play an essential marketing role in enhancing long-term corporate success. Furthermore, although marketing expenditures exert much stronger influence on Tobin's Q than guanxi-related perks do, they exert no significant influence on market share. In summary, despite firms' much heavier investments in traditional marketing activities than guanxirelated perk activities, the findings highlight the significant performance contribution that guanxi-related perks can still make to a firm. Moreover, this study reveals that political connections weaken the positive impact of guanxi-related perks on both performance measures, thus reminding executives of the dampening effect of these connections on the effective use of perk spending.
ISSN: 0148-2963
EISSN: 1873-7978
DOI: 10.1016/j.jbusres.2018.01.046
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