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The “Red Power” of Entrepreneurs
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TitleThe “Red Power” of Entrepreneurs  
AuthorMai Yiyuan, He Xiaobin and Xiong Chan  
OrganizationHuazhong University of Science and Technology;; 
Key WordsNew Ventures; Political Embeddedness; Firm Lifecycle 
AbstractMany established firms use political connections to achieve their competitive advantage. Due to the liability of newness, new ventures need to engage in more activities with government to overcome the regulatory and institutional uncertainties. However, extant literature provides sketchy accounts on the impact of political connections on new ventures. In this study we use the political embeddedness perspective to discuss the impact of political embeddedness on new ventures’ emergence, growth and stabilization. We are also interested in the dynamics process that how political embeddedness is used by entrepreneurs to derive some competitive advantages over a firm lifecycle. We test our hypotheses with data collected from a questionnaire survey on 3149 private businesses in China. Our results show that the political embeddedness can help the new ventures achieve their legitimacy at the emergence stage, and facilitate their execution of marketing strategies at the growth stage. However, our results show that the political embeddedness has negative impact on crisis prevention of new ventures at their stabilization stage. 
Serial NumberWP311 
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