The Political Root of Business Network Change

Abstract: Business elites are connected by interpersonal ties to form a network, and more-central positions in a network are commonly considered to be more desirable. But what determines the centrality of business elites among their peers? We argue that in China, because politics critically shape business, a businessperson's centrality in the network of business elites (i.e., business network) is to a significant extent determined by his/her centrality in the network of politicians (i.e., political network). Using data on all top managers and board of directors of publicly listed firms and all politicians at the prefecture level and above in China in the period of 2000-2017, we examine how political conditions shape the position occupied by each business elite in the business network.