Entrepreneurs, organizational members, political participation and preferential treatment: Evidence from China

Drawing on survey data from 150 small and medium-sized Chinese enterprises, this article examines whether the political participation of entrepreneurs and other members of the firm improves the chances of obtaining preferential treatment from government authorities. Entrepreneurs that were members of higher level legislative bodies or acted as government advisers were found to obtain preferential treatment. In contrast, membership of the Communist Party had a limited influence on entrepreneurs' ability to obtain preferential treatment. This study makes an important contribution through the development of an index to measure the extent to which all members of the organization participate in politics. The political participation of all organizational members was found to significantly influence preferential treatment from government when compared to the political participation of the entrepreneur alone. These findings are discussed in relation to the institutional context in which the research was undertaken and their managerial implications are explored. © The Author(s) 2011.