How can SMEs leverage political ties and technological innovation capability to acquire government assistance in a transition economy?

While government assistance can help SMEs remove resource deficiencies, little research has been conducted from the firms' point of view to investigate the factors that can enable firms to win competition for government assistance. This paper attempts to address this gap by building a theoretical model to explore the effects of political ties and technological innovation capability on government assistance as well as the moderating effects of opportunity exploration capability and market-oriented transition. Six hypotheses are proposed and tested using a sample of 169 Chinese SMEs. It was found that both political ties and technological innovation capability have significantly positive effects on government assistance. Furthermore, opportunity exploration capability strengthens the effect of political ties while it weakens that of technological innovation capability. Market-oriented transition strengthens the positive role of technological innovation capability while it does not significantly weaken the role of political ties.