Value creation and value maintenance

Purpose: This paper aims to examine how a firm’s capability affects its political networking in emerging economies and how the institutional environment influences the relationship between a firm’s capability and its political networking. Design/methodology/approach: The authors test the theoretical model by analyzing a database from a World Bank survey in China. Findings: The results show a nonlinear (U-shaped) relationship between a firm’s capability and its efforts in political networking. The relationship between a firm’s capability and political networking is contingent on the institutional environment, as reflected in institutional development and industry regulation. Originality/value: This study elucidates political networking in emerging economies and contributes to research on corporate political strategy.