Corporate Political Activity and Media Coverage: Effects on Strategic Change and Firm Performance -A Study on Chinese Business Leaders in the National People’s Congress

Existing studies suggest that firms actively seek to “create” their environment by trying to shape government regulations that produce a more favorable environment. The ultimate way to link a Chinese firm to the government is to elect its business leader as a member of the National People’s Congress (NPC). The effect of corporate political activities on firm performance and strategic change will be explained through the lens of Chinese business leaders’ political appointments, especially their legislation behavior in the Congress. Drawing on a sample of 365 Chinese business leaders in the NPC for a period of 7 years, we found that having business leader’s legislation proposal(s) in the Congress is negatively associated with strategic change; also a business leader’s media coverage is positively associated with performance conformity but negatively associated with strategic change.