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Embedded Guanxi Networks, Market Guanxi Networks and Entrepreneurial Growth in the Chinese Context |
Xinchun Li1(), Li Liu2() |
1. School of Business, Sun Yat-sen University, Guangzhou 510275, China; 2. School of Business, Sun Yat-sen University, Guangzhou 510275, China |
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Abstract Entrepreneurial networks create an important entrepreneurial opportunity and facilitate resource acquisition. However, there has been little research on the correlation between the types of guanxi networks and entrepreneurial growth. This paper divides entrepreneurial/managerial networks into embedded guanxi networks based on social relationship and non-economic trade contracts, and market guanxi networks based on market negotiation. Hypotheses are proposed on how the embedded/market guanxi networks evolve with enterprise age and size. Data from 270 Chinese enterprises are used to empirically test the above classification and hypotheses. The results justify the new dichotomy for guanxi networks. It is also shown that, as an enterprise grows in age and size, its utilization of embedded guanxi network tends to decrease while its reliance on market guanxi network increases. In addition, as an enterprise grows in size and age, the impact of embedded guanxi network on enterprise performance remains significant, while the impact of market guanxi network keeps increasing.
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Keywords
entrepreneurial growth
entrepreneurial networks
embedded guanxi network
market guanxi network
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Corresponding Author(s):
Xinchun Li,Email:mnslxc@mail.sysu.edu.cn; Li Liu,Email:lilyrock@263.net
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Issue Date: 05 September 2010
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