Formal and informal CPAs on business strategy and performance

Abstract

Purpose

The purpose of this paper is to examine corporate political activities (CPA) by migrant entrepreneurs to improve business performance in a host developing country.

Design/methodology/approach

The authors use a cross‐sectional analysis of 97 Chinese migrant entrepreneurs with business operations in a host developing economy.

Findings

A significant positive relationship was found between formal CPAs and performance.

Research limitations/implications

To further deepen the examination of CPAs, new quantification methodologies have to be applied to properly measure CPA relational strength, investment intensity and diversity.

Practical implications

The results enable migrant entrepreneurs to make a more educated decision on the type of CPAs to pursue and to what intensity.

Social implications

The results could motivate migrant entrepreneurs to adapt rapidly to the host country's formal customs to facilitate socio‐economic adaptation.

Originality/value

This study contributes to literature by examining both formal and informal CPAs, their inter‐relationship and their effects on migrant businesses, which have not been examined previously.

Citation

Liu Cheng, M., Wu, J. and Zhang, J. (2013), "Formal and informal CPAs on business strategy and performance", Journal of Enterprising Communities: People and Places in the Global Economy, Vol. 7 No. 3, pp. 245-273. https://doi.org/10.1108/JEC-12-2011-0037