Officials' promotion expectation, corporate strategic deviance and corporate growth in China: The moderating effect of corporate ownership

Government (especially local government) plays an important role in China's economic growth, the government is made up of officials, corporates are participants and the driving force of market economy, therefore, ignoring officials may not be able to directly explain the mechanism of corporate growth. This paper intends to discover how officials' promotion expectation may be beneficial for corporates-directly and/or indirectly via corporate strategic deviance-in terms of corporate growth. We conduct an empirical analysis of Chinese listed companies to test these arguments, the results show that officials' promotion expectation has a significantly positive impact on corporate growth; corporate strategic deviance has a mediating effect on the relationship between officials' promotion expectation and corporate growth; compared with non-state-owned enterprises, corporate strategic deviance has less influence on state-owned enterprises' growth. Our research generates a more comprehensive understanding of the political stakeholders-corporate growth relationship, provides direct evidence for the positive role of officials in corporate growth and expands the mediating research of corporate growth.

Automated summary

This paper investigates the role of government in China's corporate growth and finds that officials' promotion expectation has a positive impact on corporate growth. It also shows that corporate strategic deviance acts as a mediator between officials' promotion expectation and corporate growth. State-owned enterprises are less influenced by corporate strategic deviance compared to non-state-owned enterprises.