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Hiding in the Crowd: Government Dependence on Firms, Management Costs of Political Legitimacy, and Modest Imitation

Journal of business ethics, 2022-04, Vol.176 (4), p.629-646 [Peer Reviewed Journal]

The Author(s), under exclusive licence to Springer Nature B.V. part of Springer Nature 2021 ;The Author(s), under exclusive licence to Springer Nature B.V. part of Springer Nature 2021. ;ISSN: 0167-4544 ;EISSN: 1573-0697 ;DOI: 10.1007/s10551-020-04709-9

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  • Title:
    Hiding in the Crowd: Government Dependence on Firms, Management Costs of Political Legitimacy, and Modest Imitation
  • Author: Xiang, Yi ; Jia, Ming ; Zhang, Zhe
  • Subjects: Behavior ; Business and Management ; Business Ethics ; Coercion ; Companies ; Competitive advantage ; Education ; Ethics ; Government ; Imitation ; Legitimacy ; Management ; Original Paper ; Peers ; Philosophy ; Politics ; Poverty ; Proximity ; Public administration ; Quality of Life Research ; Selection bias
  • Is Part Of: Journal of business ethics, 2022-04, Vol.176 (4), p.629-646
  • Description: Although previous studies primarily claim that government-dependent firms can actively engage in compliance activities in order to achieve political legitimacy, access government resources, and build competitive advantages, these studies largely ignore how firms react when firm-dependent governments exert coercive pressures. We thus introduce institutional theory and the behavioral theory of social performance to develop a model of modest imitation, and we propose that the more governments depend on privately owned firms, the more firms demonstrate average social performance in order to balance efficiency concerns with political legitimacy threats. Meanwhile, whether firms imitate peers’ social performance depends on the magnitude of institutional rigidity. In turn, issue salience and spatial proximity undermine modest imitation, and political connections strengthen modest imitation. We study how all listed, privately owned firms react to the Chinese government’s call for social engagement in poverty alleviation initiated in 2015. This study uses a two-stage Heckman selection model to correct for sample-selection bias, and the results provide strong support for our arguments. This research thus extends our understanding of modest imitation in response to coercive pressure from-dependent governments.
  • Publisher: Dordrecht: Springer Netherlands
  • Language: English
  • Identifier: ISSN: 0167-4544
    EISSN: 1573-0697
    DOI: 10.1007/s10551-020-04709-9
  • Source: ProQuest One Psychology
    ProQuest Central
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