Keep or disrupt the rhythm? The effect of political connections on R&D irregularity

Most research on the effect of political connections on firms' R&D investments has focused on aggregate amounts, overlooking temporal patterns. We introduce a temporal perspective. Specifically, we examine how different types of political connection (i.e., ascribed bureaucratic connections and achieved political connections) distinctively influence R&D irregularity—that is, the uneven timing of R&D investments—and we clarify the tension between firms’ intentions to ensure continuity of R&D activities and the disruptions introduced by political and administrative processes. Based on investment patterns (2007–2016) of a large sample of privately owned, listed firms in China, we found that, in firms with ascribed bureaucratic connections, behaviors of former state bureaucrats may be different from those of other corporate executives, leading to disruptions in regular R&D investments. In contrast, firms with achieved political connections are more likely to keep regular R&D investments, due to close alignment of state and corporate goals. City-level politician turnover weakens both effects. Our study contributes significantly to the literature of strategic rhythm, political connections, and organizational learning.