Discussion on the Real-World Logic of GPR, Political Connections and Corporate Innovation Performance
DOI:
https://doi.org/10.62051/ijgem.v10n9.07Keywords:
GPR, Political Connections, Enterprise Innovation Performance, Uncertainty, Moderating EffectAbstract
Global political risks are increasing continuously, and the environment for enterprise innovation abroad has been changing significantly. Informal Channels for obtaining resources and thus influencing innovation decisions are known as political connections in Chinese enterprises. Given the current situation of continuously rising GPR, this paper investigates the internal connections among GPR, political connections and innovation performance. Research has found that GPR has both inhibiting and promoting effects on innovation; it tightens financing constraints and increases enterprise costs to reduce R&D investment, but at the same time, the increased pressure to deal with uncertainty may also motivate more innovation efforts. Political connections are moderators, and the direction of this effect is not fixed. It may reduce the negative effects of GPR by alleviating financing constraints and conveying policy information; otherwise, there will be innovation inertia and resource misallocation, thus weakening the enterprises' endogenous innovation capabilities. Differences in the institutional environment, degree of marketisation, and characteristics of the enterprises will all affect the actual direction of this moderating effect. Clarifying the above logical relationships will provide a reference for the company's innovation strategy optimisation and help policymakers improve the institutional environment.
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