Does entrepreneurs' proactive attention to government policies matter?

To explain why some privately owned firms in emerging market settings benefit from government policies while others do not, this paper goes beyond the notion of political connections and emphasizes the role of entrepreneurial attention. Building upon the attention-based view (ABV), this study illuminates how entrepreneurial attention to government policies is translated into firm performance. Based on a dataset of 2386 Chinese privately owned firms, this study finds that entrepreneurial attention to government policies facilitates corporate venturing activities that lead to enhanced performance in the Chinese context. Additionally, the relationship between entrepreneurial attention to government policies and corporate venturing is conditioned by local government intervention. This study advances our understanding of the relationship between government policies and firm performance by unveiling the importance of entrepreneurial attention, all of which serve as the micro-foundations of the heterogeneous impacts of government policies on firms. This study also enriches the entrepreneurial attention literature and sheds new light on the antecedents of corporate venturing.