Guanxi Dynamics and Entrepreneurial Firm Creation and Development in China

Document Type

Peer-Reviewed Article

Publication Date

7-2010

Abstract

Guanxi networks are critical for achieving entrepreneurial success in China. Informed by the literatures on network-based entrepreneurship and guanxi, this study used a multiple-case method to examine the development of Chinese entrepreneurs' guanxi networks in the entrepreneurial process. Data induction based on within- and cross-case analyses of six entrepreneurial firms revealed three major findings. First, guanxi network dynamics in terms of network structure, governance mechanisms, and network content change systematically across the stages of the entrepreneurship process. Second, the usefulness of guanxi ties (such as family, business associates, or government officials) is contingent on the stage of the entrepreneurial process as well as on industrial-level factors. Third, in knowledge-intensive industries, cultivating and maintaining guanxi can be achieved through knowledge and information exchange rather than traditional gift-giving or favours. The overall conclusion is that guanxi is still of paramount importance for Chinese entrepreneurs in the midst of China's transformation from a centrally planned to a socialist market economy. We propose a stage model of guanxi network development in the entrepreneurial process and discuss implications for future research.

Comments

Recipient of 2012 the Wiley Blackwell Management and Organization Review Young Scholar Award

Reprinted in 2012 Research In Emerging Economy Contexts, a virtual issue of selected papers. Edited by Will Mitchell, Co-Editor, Strategic Management Journal and Anne S. Tsui, Editor-in-Chief, Management and Organization Review.

DOI

10.1111/j.1740-8784.2010.00180.x

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