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Entertainment Spending and Capturing Value from Innovation in Chinese Firms

Published online by Cambridge University Press:  09 March 2022

Guoguang Wan
Nanjing University, China
Luqun Xie*
Shanghai Jiaotong University, China
Jiatao Li
Hong Kong University of Science and Technology, Hong Kong
Dequan Jiang
Shanghai University of Finance and Economics, China
Corresponding author: Luqun Xie (


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.



Copyright © The Author(s), 2022. Published by Cambridge University Press on behalf of The International Association for Chinese Management Research

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