MOR Abstracts

MOR 18.4 Abstract

Entertainment Spending and Capturing Value from Innovation in Chinese Firms
Guoguang WanLuqun XieJiatao LiDequan Jiang

This study examines how Chinese firms capture value from their innovations. We propose that relationship-building through business entertainment may be helpful. In particular, wining and dining key stakeholders, including clients, suppliers, distributors, and government officials, can help firms gain access to complementary resources necessary for commercializing their innovations, facilitating capturing value from innovations. However, business entertainment is less effective in regions with relatively developed market-supporting institutions, including factor markets and legal institutions. The analysis results of archival data and data from a World Bank survey of Chinese firms support all the above arguments.

The Evolution of Business Ethics in China and the United States: Convergence, Divergence, or Crossvergence?
Jong Min LeeYongsun PaikCharles VanceDonghong LiKevin Groves

This study presents a cross-temporal comparison of managerial ethics in China and the US. Although it is well established that cross-cultural differences exist in business ethics and that culture and values in a society may evolve over time, little attention has been paid to the longitudinal changes in such cross-cultural differences that might have occurred over time. Building on three different perspectives on values evolution, namely, convergence, divergence, and crossvergence, we investigate whether and how cross-cultural differences in managerial ethical decision-making and the associated moral philosophy have changed in China and the US over the decade between the mid-1990s and the mid-2000s. Our analysis reveals that the difference in Chinese and American managers’ ethical decision-making evolved in many different directions over the decade, lending support to the crossvergence perspective. Interestingly, however, we discover that the divergence outlook prevails when it comes to the moral philosophies behind their decision-making. These findings provide critical insights into cross-cultural as well cross-temporal evolution in business ethics in a world of increasing cross-cultural and multicultural interactions.

Behind the Political Connections Under Emerging Democracies
Selenge UlziisukhZelong Wei

In light of inconclusive findings on the effect of political connections, this study explores conditions that affect the effectiveness of political connections on firm performance in democratic systems. First, using a resource dependence rationale, this study stresses the importance of variation in political connections and classifies direct and indirect political connections based on sources of power and the mechanisms for developing connections. Second, this study recognizes that influencing political outcomes is an entire political process in which political power matters. Furthermore, as power is central to the resource dependence rationale unlike exchange in transaction cost economics, this study explores how the effectiveness of political connections is contingent on the dynamics of de jure political power. We find that the effect of direct political connections is susceptible to changes in de jure political power due to its dyadic relationship with de jure power, while indirect political connections are more robust to such changes due to their connections with informal networks holding de facto political power. Further, the positive effects of political connections on firm performance are mediated by operational capability.

Not All Types of Social Networks Are Good: The Dual Effects of Social Networks on Courtesy Stigma
Longwei TianPeter Ping LiEn XieYuan Li

When a firm is accused of serious misconduct, its executives, even those who are nonculpable, are stigmatized by the firm’s stakeholders, a phenomenon known as courtesy stigma. One research stream explores how executives’ social networks mitigate courtesy stigma, with an emphasis on the positive effect of social networks. From the perspective of a social network as an information pipe, we suggest that social networks are a double-edged sword in the context of courtesy stigma because of their distinctive insulation and exposure mechanisms. Our proposed hypotheses are supported via event history analysis using data collected from a Chinese sample of listed firms that demonstrated financial misconduct in the period 2007–2016. Our study contributes to the literature on social networks and courtesy stigma by revealing their complex links.

Evolution of the Chinese Intellectual Property Rights System: IPR Law Revisions and Enforcement
Jie HongJakob EdlerSilvia Massini

Since the first Trademark Law was enacted in China in 1982, the Chinese intellectual property rights (IPR) system has undergone significant changes in both the design of the legislation and its enforcement. In this article, we analyze the evolution of IPR legislation and enforcement in China. To this end, we illustrate the evolutionary changes of the Chinese IPR system and analyze the changes introduced in four revisions (1992–1993, 2000–2001, 2008–2013, and 2019–2020). Our analysis shows that Patent Law, Trademark Law, and Copyright Law have been substantially enhanced, especially since 2000, when China improved its IPR system to comply with the TRIPS Agreement and join the WTO, and especially the most recent amendments of these three IP Laws. We discuss the number of IPR infringement cases handled by both relevant administrative authorities and courts to analyze IPR enforcement in China. Results indicate that the development of IPR protection enforcement followed the improvement of relevant IPR laws. The two revisions introduced after 2008, changes in the Chinese IPR system, and an increasing number of IPR infringement cases handled by relevant authorities also suggest the willingness of the Chinese government to further enhance its IPR protection.