Table 1 Measurement items.

CPA

C1:Companies are often involved in the government decision-making process to avoid adverse effects.

C2:Companies often adopt public relations activities to maintain their image and position in society.

C3:Company executives are directly involved in the decision-making process as representatives of the National People’s Congress and the Chinese People’s Political Consultative Conference.

C4:Companies directly influence the development of public policy by participating in the government’s decision-making process and in lobbying methods.

C5:Companies will influence government policies through industry associations.

Financial slack

U1:Whether the firm’s retained earnings are sufficient for market expansion.

U2:Whether it has a pool of financial resources that can be used on a discretionary basis.

U3:Whether it can secure necessary bank loans.

Operational slack

A1:Whether the firm’s production capacity has a considerable margin.

A2:Whether the firm has been operating below-engineered capacity.

Entrepreneurial behavior

E1:In general, the top managers of our organization favor a strong emphasis on R&D, technological leadership, and innovations.

E2:In the past three years, our organization has marketed a large variety of new lines of products or services.

E3:In the past three years, changes in our products or service lines have been mostly of a major nature and reflect our firm’s tendency to lead or develop new procedures, technologies, and new products or services.

Managerial attitude toward risk

R1:In general, the top managers of my organization have a strong propensity for high-risk projects (with chances of very high return).

R2:Owing to the nature of the environment, the top managers believe that bold, wide-ranging acts are necessary to achieve our organization’s objectives.

R3:When uncertainty is present, our organization typically adopts an aggressive posture.