In recent years, the study of firms operating in China's transition economy has attracted growing attention from mainstream organizational researchers. As the Chinese economy increasingly becomes integrated into and plays an important role in the global economy, an understanding of organizational issues in China has not only economic implications, but theoretical significance as well. Since China differs from Western market economies in varying dimensions, it offers fascinating grounds for testing existing organizational theories and advancing new ones.
Understanding firm-performance differences and sources of sustained competitive advantage has been a major area of research in the field of strategic management (Porter, 1985; Rumelt, 1986). Since the 1960s, a major framework has been used to structure much of this research. This