Examining the linkage between managerial ties and firm performance: The mediating role of marketing capabilities and moderation role of industry - A meta-analytic approach

Abstract

This paper investigates the relationship between managerial ties (business and political ties) and firm performance (operational performance and innovation). We consider marketing capabilities as a mediating variable to analyze how it mediates the relationship between managerial ties and firm performance. Previous studies have often taken a piecemeal approach to examining the ties-performance linkage and have been limited by sample size. We use a meta-analytic structural equation modeling (meta-SEM) approach to analyze the proposed relationship. We consider 281 studies assessing 943,331 effect sizes to analyze the results. To investigate the relationship, we consider social exchange and resource-based theory. The results suggest that business (political) ties are positively (negatively) associated with operational performance, while both business and political ties are positively associated with innovation. Further, our result suggests that (a) approximately 14.2% of the effect of business ties on innovation is mediated by marketing capabilities and (b) industry type moderates the relationship between ties and performance. This study helps managers leverage managerial ties to improve firm performance and further suggests a proper mechanism through which firms can improve performance.