The Role of Entrepreneurs' Political Ties in Private Firms R&D Investment and the Contingency Value

Drawing upon the embeddedness pespective and resource-based view, this study aims to examine how entrepreneurs' political ties influence private firms R&D investment in emerging market. Using longitudinal and mixed survey data from a sample of private firms in China's 31 provinces, we demonstrate that entrepreneurs' political ties have an inverted U-shaped relationship with private firms R&D investment. We also find that both the positive effect of political ties on R&D investment when the ties are relatively low and the negative effect of political ties on R&D investment when the ties are relatively high are weaker for entrepreneurs with high education level than those with low level. And the same result for market environment with high product market development and that with low development. Theoretical and managerial implications are discussed.