press release
Published: 06 June 2024

Political connections fuel innovation in emerging markets, but talent makes the difference

Political connections can be a double-edged sword for innovation in emerging markets. While they provide companies with valuable resources and partnerships, the right kind of skilled talent is needed to take advantage of these benefits, according to a new study from the University of Surrey.  

Firms can be helped in emerging markets through political connections by gaining access to resources and knowledge or driving innovation. However, highly skilled employees are essential to utilise these benefits. 

The study examined data from over 3,200 Chinese-listed businesses over a decade. Researchers looked at various factors, including: 

  • The CEO's political connections (determined by previous government work experience).  
  • The business' level of innovation (measured by the number of invention patent applications). 
  • The educational backgrounds of employees.  

This comprehensive approach allowed Surrey's researchers to analyse the complex relationship between political connections, talent, and innovation in emerging markets. 

The research differentiates between two types of employees: under-qualified and highly skilled employees. Companies with highly skilled employees can better use resources and knowledge from political connections, leading to more innovation.  

Read the full study in the International Business Review.    



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