Political connections, internet use, and firm innovation

Abstract

We propose that despite the general positive impact of maintaining political connections, internet utilization generates a disconnecting effect on the impacts of political connections on firm innovation. Using a unique survey dataset of Chinese private enterprises, the present study found that private firm owners’ internet use moderates the relationship between political connections and firm innovation. The present study therefore enriches the literature on the effects of political connections and resource-based view by discovering that internet technology disconnects firms’ political connections and substitutes for the function of political connections on information search and resource acquisition.

Keywords

• Internet
• Political connections
• Private firms
• Innovation