This study examines how Chinese firms capture value from their innovations. We propose that relationship-building through business entertainment may be helpful. In particular, wining and dining key stakeholders, including clients, suppliers, distributors, and government officials, can help firms gain access to complementary resources necessary for commercializing their innovations, facilitating capturing value from innovations. However, business entertainment is less effective in regions with relatively developed market-supporting institutions, including factor markets and legal institutions. The analysis results of archival data and data from a World Bank survey of Chinese firms support all the above arguments.

This study presents a cross-temporal comparison of managerial ethics in China and the US. Although it is well established that cross-cultural differences exist in business ethics and that culture and values in a society may evolve over time, little attention has been paid to the longitudinal changes in such cross-cultural differences that might have occurred over time. Building on three different perspectives on values evolution, namely, convergence, divergence, and crossvergence, we investigate whether and how cross-cultural differences in managerial ethical decision-making and the associated moral philosophy have changed in China and the US over the decade between the mid-1990s and the mid-2000s. Our analysis reveals that the difference in Chinese and American managers' ethical decision-making evolved in many different directions over the decade, lending support to the crossvergence perspective. Interestingly, however, we discover that the divergence outlook prevails when it comes to the moral philosophies behind their decision-making. These findings provide critical insights into cross-cultural as well cross-temporal evolution in business ethics in a world of increasing cross-cultural and multicultural interactions.

In light of inconclusive findings on the effect of political connections, this study explores conditions that affect the effectiveness of political connections on firm performance in democratic systems. First, using a resource dependence rationale, this study stresses the importance of variation in political connections and classifies direct and indirect political connections based on sources of power and the mechanisms for developing connections. Second, this study recognizes that influencing political outcomes is an entire political process in which political power matters. Furthermore, as power is central to the resource dependence rationale unlike exchange in transaction cost economics, this study explores how the effectiveness of political connections is contingent on the dynamics of de jure political power. We find that the effect of direct political connections is susceptible to changes in de jure political power due to its dyadic relationship with de jure power, while indirect political connections are more robust to such changes due to their connections with informal networks holding de facto political power. Further, the positive effects of political connections on firm performance are mediated by operational capability.

When a firm is accused of serious misconduct, its executives, even those who are nonculpable, are stigmatized by the firm's stakeholders, a phenomenon known as courtesy stigma. One research stream explores how executives’ social networks mitigate courtesy stigma, with an emphasis on the positive effect of social networks. From the perspective of a social network as an information pipe, we suggest that social networks are a double-edged sword in the context of courtesy stigma because of their distinctive insulation and exposure mechanisms. Our proposed hypotheses are supported via event history analysis using data collected from a Chinese sample of listed firms that demonstrated financial misconduct in the period 2007–2016. Our study contributes to the literature on social networks and courtesy stigma by revealing their complex links.

Since the first Trademark Law was enacted in China in 1982, the Chinese intellectual property rights (IPR) system has undergone significant changes in both the design of the legislation and its enforcement. In this article, we analyze the evolution of IPR legislation and enforcement in China. To this end, we illustrate the evolutionary changes of the Chinese IPR system and analyze the changes introduced in four revisions (1992–1993, 2000–2001, 2008–2013, and 2019–2020). Our analysis shows that Patent Law, Trademark Law, and Copyright Law have been substantially enhanced, especially since 2000, when China improved its IPR system to comply with the TRIPS Agreement and join the WTO, and especially the most recent amendments of these three IP Laws. We discuss the number of IPR infringement cases handled by both relevant administrative authorities and courts to analyze IPR enforcement in China. Results indicate that the development of IPR protection enforcement followed the improvement of relevant IPR laws. The two revisions introduced after 2008, changes in the Chinese IPR system, and an increasing number of IPR infringement cases handled by relevant authorities also suggest the willingness of the Chinese government to further enhance its IPR protection.

To stimulate a debate about the rise of China's digital economy, this essay compares China and the US in one key area of the digital economy – e-commerce and internet-based services. China still lags behind the US in internet penetration, but it distinguishes itself by building a mobile-first, fiber-intensive, and inclusive digital infrastructure. A favorable infrastructure, innovations tailored to the large Chinese market, and local firms’ rapid commercialization of products and services turned the world's largest domestic population into active online consumers, helping China overtake the US by a large margin in retail e-commerce and digital payment. While China translated digital technologies into leading business-to-customer and customer-to-customer businesses, it has not been so successful in business-to-business services. The US is still ahead in the general-purpose technologies underlying the digital economy.

This research commentary responds to Jiang and Murmann (2022), by offering further explanations for the miraculous growth of the digital economy in China from both the demand and supply perspectives. To complement their views, we identify several additional important factors, and classify them in three categories in an explanatory model. We believe that factors on the demand side played a primary role, along with innovative and entrepreneurial e-commerce service providers on the supply side. Infrastructures and government policies provided the foundation and a facilitating environment. We conclude that digital transformation of traditional industries will become the next wave of digital economy, stronger than the previous wave of e-commerce. Implications for research and practices are also discussed. In addition, we highlight emerging trends and turbulences. In conclusion, despite short-term turbulences, we expect that the digital economy in China will make big-stride progress in the long term, with strong potential to continue its growth.

The extensive narrative of growth and development of the information and communication technologies (ICTs) in China by Jiang and Murmann (2022) and the discussion of Chinese strengths and weaknesses portray the remarkable progress that China has made, especially in technology relative to advances in the basic sciences. In our response, we situate their contribution in the larger context of Chinese economic growth and the challenges it faces in transforming these accomplishments into an embedded national capability to become a leading innovation economy and thereby deliver prosperity to its enormous but aging population. The contexts for the successes and weaknesses in ICT that Jiang and Murmann (2022) describe so admirably are vital for a more comprehensive understanding of their place in the overall development of China.